Global cocoa crisis

VIVANI

Gerrit, why is chocolate getting more and more expensive?

Gerrit Wiezoreck

Demand for cocoa has been rising for years, while supply has been falling. Last year, around a third of the harvest in West Africa failed - over 70 per cent of the world's cocoa comes from there. This is causing a shortage on the global market and causing cocoa prices to skyrocket. This is particularly hard for EcoFinia: our VIVANI brand is known for its high-percentage bars with a particularly high cocoa content.

VIVANI

But VIVANI cocoa comes from Latin America, especially the Dominican Republic?

Gerrit Wiezoreck

That's right. We work there in the form of long-term partnerships with small organic cooperatives, which we guarantee fair payment. But many large European manufacturers are now trying to find the missing cocoa in Latin America. They are travelling to individual farms there by lorry and buying the organic cocoa directly "on the road", which was actually contractually guaranteed to us. The crisis is exacerbated by speculators who want to make a tidy profit on the stock market. In addition, weather phenomena such as "El Niño" - exacerbated by climate change - have also had a negative impact on crop yields in Latin America.

VIVANI

And why are other chocolate companies able to maintain their prices?

Gerrit Wiezoreck

Most large manufacturers have huge stocks from which they can still draw. And the large quantities they produce mean that higher raw material prices have less of an impact. Especially as many chocolates contain very little cocoa anyway. We small chocolate manufacturers, on the other hand, usually produce directly, without long storage periods. This means that we are now desperately looking for good organic beans - and have to pay significantly more for them. Unfortunately, we will have to pass on these additional costs to our products.

VIVANI

What are currently the biggest problems in cocoa cultivation?

Gerrit Wiezoreck

Cocoa trees are very sensitive to weather conditions. The climate crisis is leading to longer periods of drought and rain. And because the price of conventional cocoa from West Africa has been very low over the last five to seven years, farmers there have had little opportunity to invest in their own plantations. What's more, conventional cocoa for the mass market is grown in monocultures. The trees are grown close together in rows without the protection of other plants. This makes them more susceptible to fungal diseases and weather damage.

VIVANI

How high is the current price of cocoa?

Gerrit Wiezoreck

The price of cocoa has risen by over 200 % since March 2023. For many years the price has hovered at around $2.500 per ton. In the second half of 2023 it started to rise significantly to around $4.500 and in the first quarter of this year the price reached an ultimate high of over $11.000 per ton. Raw materials account for at least 50 % of the production costs of our chocolates. It's easy to calculate what this means for a chocolate bar containing at least 70 % cocoa.

VIVANI

Will there be better times again?

Gerrit Wiezoreck

That depends above all on the next big harvests in West Africa, which usually start in September and October. Until then, we assume that prices will remain as high as they are. In the worst-case scenario, there will be massive crop failures again - and cocoa beans will become even scarcer and more expensive. Another problem is the destruction of the tree population. It takes around 5-6 years for a cocoa tree to bear its first fruit. It does not produce a full crop until it is 10 years old. But even with better harvests, the price of chocolate will certainly not fall to the same low level as a few years ago. However, good chocolate cannot be as cheap as a bag of sugar. Everyone will still be able to afford chocolate - but they will have to savour it more consciously.

VIVANI

Why should I continue to buy organic chocolate despite higher prices?

Gerrit Wiezoreck

The raw materials used in organic chocolate generally come from mixed crops. These are much better equipped to deal with climate change than monocultures. Due to the high biodiversity - i.e. due to a variety of diverse plant species - the cocoa farms are more resistant to extreme weather phases. However, the majority of West African cocoa is grown in monocultures. In extreme weather conditions - such as long periods of drought - poor harvests are inevitable. In addition, the trees are much more susceptible to disease during such periods. We are currently experiencing this scenario.