A shortage of cocoa pushed the commodity price of cocoa to a total of $12,500 a tonne on the London market last spring, a 400% increase over the past decade.

Climate change is transforming agriculture worldwide, with changing weather patterns disrupting production systems. According to the American Farm Bureau Federation, unpredictable temperature extremes and variable rainfall caused billions of dollars in crop damage in the United States alone.

These trends are being seen around the world, affecting everything from corn to coffee, and cocoa is no exception. Cacao grows only in a narrow area around the equator, making it particularly vulnerable to changes in climatic conditions.

Severe flooding and crop disease in West Africa last year exacerbated growing losses of the bean in the region, which produces more than 60 percent of the world’s cocoa. Increasingly unfavorable growing conditions put additional pressure on production systems struggling with low investment. Low profit margins for farmers often prevent them from implementing management practices that can enhance crop resilience and productivity.

The International Cocoa Organization projects that global cocoa supplies will decline by 13 percent to 4.38 billion tons in 2024, with cocoa stocks possibly at their lowest level in 45 years. This has serious implications for the nearly $120 billion chocolate industry, which is expected to grow at an annual rate of 4 percent through 2030, according to Grandview Research.

Rising commodity cocoa prices have already been pushed down in the form of increased product prices for consumers, downsizing of products known as “sugar inflation”, and ingredient substitution. Some companies are expanding their non-chocolate offerings, while others are making chocolates without any cocoa. These strategies may work for large-scale chocolate makers like Hershey’s and Mondelez, but they only work for craft chocolate makers whose business depends on high-quality cocoa beans.

Two such chocolate makers, Dandelion Chocolate and Frosty Chocolate Works, said they had raised their prices by 10%-20% in the past six months. While Dandelion increased its price by 10% to $11 for a 56g bar, the retail price increased by 20% to $12 per 60g plain dark bar.

Harvard Lecturer in the Department of African and African American Studies and founder of the independent nonprofit Fine Cacao and Chocolate Institute. According to Carla Martin, the two craft chocolate makers are part of nearly 400 specialty chocolate companies across the United States. That number has doubled since Martin and his team made their first calculations at FCCI in 2017.

“Every chocolate bar is like a partnership between a cacao producer and a chocolate maker,” said Greg D’Alessandre, chief sourcing officer for San Francisco-based Dandelion Chocolate. Dandelion and others like it say they ethically use high-quality cocoa from a single origin (a producer or a region) and use only sugar (and sometimes cocoa butter) to make their single-origin chocolates in small batches. do This brings out the distinct flavor of the beans in the final product. Like wine and grapes, the flavor of chocolate is influenced by the genetics of the cacao and the conditions under which it is grown and processed.

With so much riding on the taste of beans, sourcing becomes more important than ever. According to Dandelion, it takes a long time to establish and maintain the necessary partnerships, infrastructure, and production processes for each.

But this attention to detail comes at a premium: The company typically pays at least double the commodity price of cocoa. But late last year, they were paying $13,000 a tonne for their expensive beans, which is not far below the current price of the commodity.

This illustrates a challenge many craft chocolatiers are facing – as the gap between their price range and commodity prices closes, so do the marginally higher prices they can offer. They may no longer be attractive to cocoa sellers. In some cases, current market conditions have resulted in their cocoa being sold to other buyers. In the long run, high commodity prices can eliminate the primary incentive that producers have to invest in maintaining high-quality production processes.

Dandelion is paying more for its cocoa across the board, but as access to cocoa from its established sources fluctuates due to reduced production, sales to other buyers, and prohibitive prices, it is the new origin of cocoa. Looking for

Dahlia and Brian Graham of Furnish Chocolate Works are doing just that. Fruition opened in Shukan, New York in 2011, selling its chocolate both wholesale and retail. Their retail café space stocks chocolate bars and their chocolate confections, as well as beverages and baked goods. Dahlia Graham said she saw the price of her most-used beans nearly triple earlier this year. Such price hikes are forcing them to rethink their origins.

“We still trade transparently, and we’re looking at sources that have really unique flavor profiles where there are good labor practices on the land. All the different things that we look for, we still consider. .but when we’re looking at the price lists and the difference is $2, $3, $4, $5 difference [per kilo]Price affects what we can do, Graham said.

In addition to changing sources or buying less from established partners, Graham foresees possible adjustments to their business model, such as reducing their number of origins to narrow their product line or retail. Expanding the confectionery or wholesale arms of the business.

Both Dandelion and Furshan manufacture sweets and have retail cafe locations that contribute to their economic viability. In fact, Greg D’Alessandre reports that Dandelion is now primarily a hot chocolate and confection business, with chocolate bars playing a less prominent role than before.

Both chocolate makers expect strong sales this holiday season, their busiest time of year. But what comes next for the industry is unclear. Changing weather patterns and shifts in the supply chain based on market conditions will continue, and going forward, Carla Martin fears that new tariffs on foreign products under the Trump administration could mean chocolate makers’ equipment, packaging, and The price of raw materials will increase dramatically. “I think it’s going to be blatantly hostile to the kinds of businesses that fall into that particular category,” he said.

Despite the current challenges, Greg D’Alesandre described the rising cocoa price as a “need to reset the industry”. “Because so many of the stories are coming from the perspective of the chocolate side of things, a lot of the stories feel sad and doomy, but let’s talk about the cocoa farmers for a second. The people who work in the world. “That’s something we should all celebrate,” said D’Alessandre. “It’s definitely the right thing to do.”