Fine chocolate getting more expensive?
Posted in: News & New Product Press (Read-Only)
The cacao market is quite complex, so the answer to this is quite complex. First a few stats:1) The current annual harvest for cacao is about 3 million metric tons (tonnes).2) At the moment, supply and demand are roughly equal.3) The current price for commodity cacao is about $1,700/tonne.4) Specialty cacaos can command prices of up to $4,000/tonne5) Worldwide demand for cacao is expected to increase by 50% over the next 10 years. Two things are fueling this demand:5a) Increase in interest in high cocoa content bars.5b) Large economies not normally considered to be chocolate eaters (including China and India with 1/3 or the world's population between them) are quickly developing an interest in chocolate.6) The price for commodity cacao is expected to increase to $4,500/tonne.7) Depending on the growing region, the percentage of the harvest that is left on the tree because of disease or insect damage is 30-80%.8) Depending on the bean variety it takes between 2 and 5 years for a cacao tree to start producing harvestable pods.9) Fine flavor cacao trees take longer to start bearing, produce fewer beans per tree, and are more susceptible to disease.9a) Vietnam came from nowhere to become the 3rd largest coffee producer in the world in a very short time because of government interest and subsidies. They are embarking on a similar program for cacao.When you take all of these factors into account:A) The price for all chocolates will increase.B) The desire (by manufacturers) to replace cocoa butter with cheaper fats will increase. This is likely to happen only for inexpensive mass market chocolates where price is a major consideration.C) The increase in demand will increase planting of trees, but they will take several years to become productive. The major chocolate manufacturers will pressure growers to plant high-yielding bulk beans such as CCN-51 from Ecuador rather than flavor beans with criollo genes in them.D) Because of the rise in the price of commodity cacao, farmers will be dis-incented to grow flavor beans because they can make a lot of money (comparatively speaking) growing commodity beans.What will happen is that:i) There will be an increased emphasis on farmer field schools to teach them techniques to reduce disease and insect damage and therefor increase yields from existing plantings. Experience suggests that farmer training can reduce lossses by 50% or more.ii) Premium chocolate makers will start working very closely with their growers, buying beans directly and paying them directly in order to secure a lock on supplies. They will also start writing long-term contracts like the one Amedei has with Chuao in order to get farmers to continue to deliver fine flavor cacao beans.iii) This interest by premium chocolate makers will lead to a rise in the production of fine flavor cacao but not enough to cover the shortfall.In the end, the gap in price and quality between mass market and gourmet chocolate will increase even as the overall price for all chocolates increases.The (relative) good news in this is that chocolate will still remain inexpensive compared with wines and balsamic vinegars, for example.
biagiochocolate.com
