How Manufacturers Can Beat the Cocoa Crisis in the UK and Beyond

Necessity is the Mother of Invention.

This well-known saying could be the best advice for manufacturers producing cocoa-containing products. Crisis after crisis has hit the cocoa trade, leading to shortages, price increases, and an overall sense of foreboding about the future of chocolate.

As of July 2024, the chocolate and confectionery market in the UK is estimated to be worth 5 billion and high cocoa users in the baking industry are worth 9.5 billion. There’s a lot at stake to ensure the treats consumers crave and the vital ingredients food manufacturers require are still affordable and available. Even if these products only comprise part of a portfolio of brands, they can still have a massive impact on a company’s bottom line, causing a loss of brand lovers and sellers alike.

The cocoa crisis isn’t new. Years have passed, while farmers have battled unexpected weather conditions brought on by creeping climate change. A new study by the University of Oxford found that cocoa crops are at serious risk from unpredictable weather and temperature fluctuations. Looking into three countries producing a third of all global cocoa, they found that better pollination and farm management could increase yields. However, according to The World Cocoa Foundation, many of these farms are located within impoverished nations, making it almost impossible to employ these countermeasures without outside funding. 

More recently, farmers in Ghana, who make up 20% of the world’s cocoa (an estimated 1,000,000 metric tons), chose to dig for gold over harvesting their crops. Worse still, chemicals such as mercury, arsenic, and cyanide used within the mining process can have a serious environmental impact; soil health suffers, thus affecting plants grown in it. Of course, the land itself, which was once chock full of cocoa plants, is now packed with gold mining equipment.

This has driven a price increase in cocoa, leaving many manufacturers with a sour taste.

Popular UK brand Cadburys raised the price of its products last year and is shrinking the size of its bars this year due to cocoa’s soaring prices. Some smaller chocolatiers have even had to close. All this is leading to chocolate becoming more of a luxury product for consumers. It is fast becoming a chocolate-covered self-fulfilling prophecy that when the demand goes down, supply follows suit, sending prices even higher.

How can manufacturers stop their chocolate product decline?

Sourcing New Suppliers

Cocoa farming requires a perfect storm-style climate. Currently, 10 countries have this favorable climate to produce sustainable cocoa crops. Sourcing new suppliers of cocoa powder, nibs, beans, and liquor is one option for producers seeking better pricing. However, when engaging with any new supplier, it's essential to test ingredients to ensure the overall quality of the end product. KPM Analytics’ SpectraStar™ XT Series can test fat, moisture and more within less than a minute, meaning processors can turn deliveries away at the door that do not meet their standards. The machine takes up a small amount of space, as it’s roughly the size of a desktop printer, and requires little training to operate, making it accessible to most staff members. With food fraud on the rise worldwide, this type of testing will become increasingly necessary. By not accepting expensive, fraudulent ingredients that could damage your brand, the SpectraStar will quickly pay for itself.

‍Alternatives to Cocoa

Legumes such as carob and fava beans are being used as alternatives to cocoa within chocolate products. However, recent research has shown that using a yeast extract can deepen the flavor of chocolate, leading manufacturers to use less cocoa in recipes. Known as the Maillard reaction, yeast extract, when heated, can enhance the richness of the chocolate flavor as well as add to the rich brown color consumers expect when buying quality chocolate products. With this added ingredient, the cost of the cocoa per product is lowered.

SpectraStar XT Series can test yeast and other products for quality and ensure safe, clean labelling for brand protection and consumer happiness. Without outsourcing the costly quality testing to outside laboratories, purchasing this equipment can prove an investment far into the future when experimenting with recipes.

Developing New Products

If chocolate becomes a luxury item, many UK consumers will be priced out of the market. The cost of living in the UK has risen in recent years, so more affordable, and, dare we say, healthier products are on everybody’s radar. Manufacturers should always be creating and testing new and exciting products to bring to market, picking up the sales slack from old ranges that use larger amounts of cocoa.

With the SpectraStar XT Series, testing the quality of new ingredients, and the overall product, ensures not only clean labelling and adhering to government food legislation but also taste – the key ingredient as to whether your new product will sell in a highly competitive marketplace.

Conclusion

Going forward, the world is in for trying times. Manufacturers need to think on their feet and have plans firmly in place for every eventuality. If cocoa becomes a victim of climate change or world events, plans should start today to ensure an uninterrupted supply chain not just to protect profits, but also to retain consumer loyalty.

Contact KPM Analytics today for further information on how we can help you weather the cocoa crisis.