July 10, 2024 – The global cocoa market is facing a perfect storm of challenges. Climate change is impacting production, rising costs are putting pressure on consumers and suppliers, and the demand for healthier and more sustainable options is growing. But amidst these challenges, a wave of innovation is emerging, offering exciting opportunities for the future of cocoa trends.
Climate Change and the Cocoa Market Crisis
The impact of climate change on cocoa trends is undeniable. Extreme weather events like floods and droughts are becoming more frequent, impacting yields and driving up prices. The average price of cocoa has surged by 67.55% year-on-year, with the El Niño phenomenon exacerbating the situation. This has led to a significant increase in the cost of cocoa ingredients, impacting the entire food and beverage industry.
Consumer Concerns and Shifting Preferences
Consumers are increasingly aware of the challenges facing the cocoa industry and are demanding more sustainable and ethical practices. The cost-of-living crisis is also impacting purchasing decisions, with consumers looking for value and affordability. This has led to a surge in demand for healthier chocolate options, with claims like high protein, low sugar, and plant-based gaining popularity.
Supplier Strategies: Balancing Price and Preference
Cocoa suppliers are facing a delicate balancing act. They need to manage rising costs while catering to consumer demands for healthier and more sustainable options. Innova’s cocoa trend research shows that consumers are noticing increased prices from their favorite food and beverage products, often applying to cocoa based products. Storytelling will therefore be essential for brands to justify purchases from consumers. Some strategies include: transparency about price rises, adding nutritional value to existing products, offering premium versions for impulse purchases, and utilizing more sustainable practices like regenerative farming, and lab-grown cocoa.
Cocoa Market Trends
Amidst difficulties, cocoa is still a growing ingredient in the food and beverage industry. In the past five years, cocoa has grown by 3% CAGR as an ingredient present in food and beverage products, now seen in 13% of all products in the global market. Top ingredients in the cocoa market include cocoa butter, cocoa mass, cocoa powder, cocoa, and cocoa solids.
Europe is the top region for cocoa product launches, representing 48% of new cocoa product development. The Middle East and Africa are the fastest growing regions, with a 10% CAGR in launches over the past five years.
Confectionery and bakery are the main categories where cocoa is present, combining to represent 66.4% of food and beverage launches with cocoa ingredients.
Emerging Trends: Cocoa-Free Alternatives and Innovation
The search for sustainable and affordable alternatives to cocoa is driving innovation. Companies are developing “cocoa-free” chocolate using ingredients like carob, oats, and sunflower seeds. Fermentation technology is playing a key role in replicating the taste and texture of traditional chocolate.
Win Win is a young company, and a leading manufacturer of cocoa free chocolate. Through a process of fermentation, roasting, mixing, and chocolate making, the company produces cocoa free chocolate that they claim tastes like the conventional thing.
Larger brands are additionally entering the cocoa-free chocolate market. Cargill has partnered with the startup Voyage Foods to produce cocoa-free chocolate, using ingredients like grape seeds, sunflower protein flour, palm oil, and shea kernel oil.
What’s Next in Cocoa Trends?
Cellular agriculture is emerging as a potential solution for producing cocoa sustainably and ethically. This technology involves growing cocoa cells in a lab, offering a climate-friendly and potentially more affordable option. California Cultured is one such company innovating in cellular agriculture. They use novel plant stem cells grown in a low-cost food-grade plant media. Their proprietary process results in chocolate that highlights the best flavors and functional compounds, and reduces the need to add more sugar.
The future of cocoa also likely lies in embracing innovation and sustainability. Companies are investing in research and development to create new products and processes that address consumer concerns and environmental challenges. Some companies are exploring ways to utilize discarded cocoa byproducts, creating new products and reducing waste. Practices like shade-grown cocoa and agroforestry are also gaining traction, promoting biodiversity and soil health. Additionally, consumers are demanding transparency in the supply chain, and companies are responding by implementing traceability systems.
This article is based on our report, “Cocoa: Current Global Challenges & Future Opportunities.” If you are interested in reading this report, feel free to request a demo.
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