Cocoa Crisis: Rising Prices and Drought Forcing Chocolate Manufacturers to Seek Alternative Raw Materials

Fazer seeks alternatives as cocoa prices soar

Cocoa crops in Africa have been devastated by heavy rains followed by drought, leading to a surge in prices and prompting chocolate manufacturers to seek alternative raw materials. The price of cocoa has soared to unprecedented levels, with cocoa futures prices rising by 60% in New York this month and more than doubling this year.

The adverse weather conditions in Ghana and Ivory Coast, the world’s largest cocoa-producing countries, have been attributed to the El Niño weather phenomenon. This has exposed cocoa trees to diseases and caused the beans to rot on the trees. The drought that followed has further impacted cocoa production. Climate change has exacerbated these challenges, with El Niño becoming stronger.

In response to the rising cocoa prices, chocolate manufacturers have implemented various strategies. Some have increased prices, while others have reduced the size of their products without changing the price. Fazer, a Finnish company, has raised prices due to the cocoa price hike and is exploring alternative raw materials such as cereals to replace cocoa.

Fazer is researching potential substitutes for cocoa and experimenting with cereal-based chocolate bars while aiming to maintain product quality. They are also looking at cost-saving measures as they prepare for various future scenarios. Despite efforts to mitigate the impact of rising cocoa prices, uncertainty remains in the industry as operators monitor the autumn cocoa harvest for future supply availability. High cocoa prices may eventually be passed on to consumers, affecting their purchasing decisions.

The ongoing challenges faced by the industry require innovative solutions that can adapt to changing landscapes.

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