Chocolate was strictly reserved for royalty when the Spanish Conquistadores first brought it to Europe in the 16th century. But in the 500 years since, the continent has grown to be a region of devout chocoholics, eating more than anywhere else on Earth.
The US is not far behind and with India and China now getting a taste for chocolate too, cocoa demand is through the roof. But with climate change placing an unprecedented squeeze on supply, a crunch has long loomed large.
It finally hit in 2024 with cocoa prices - which have typically held between $1,000 and $3,000 per tonne – rocketing to a 50-year high of almost $13,000 as climate change, disease, and aging trees resulted in mass crop failure across Ghana and Ivory Coast where most of the world’s cocoa is grown.
Prices are now finally down due to a recovery in Ghana and stronger production in South American countries like Ecuador, but they still remain above long-term norms.
Amid such strains, the efforts of the confectionary industry to cut its reliance on chocolate have been well-documented, with many of the biggest food manufacturers cutting the cocoa volume in their products and hoping customers are unable to notice.
Biscuits like Club and Penguins – both made by Pladis - are now no longer allowed to be described as “chocolate” as they contain more palm oil and shea oil than cocoa. The same goes for Nestlé’s Toffee Crisp and Blue Riband bars, while its white chocolate Kit Kats are now simply labelled “white” instead of “white chocolate”.
For now, these moves appear limited, with a Nestlé spokesperson confirming “there are no plans to make the same change across our other chocolate products at this time”. Nonetheless, manufacturers are clearly becoming far more selective in how cocoa is used.
Fortunately for them, recent years have seen a raft of innovations hitting the market including from some of the world’s biggest ingredients suppliers. Ofi, for example, has engineered products with 30% less cocoa but no perceptible loss of flavour, it claims, by treating cocoa solids with an alkalizing agent that reduces the natural acidity of cocoa, giving it a less bitter taste and darker colour.
The company has also come up with other options to cut the cocoa content such as using “fillers” like nuts or, as Nestlé and Pladis have done, replacing cocoa butter with vegetable oil.
Elsewhere, things are going one step further with “cocoa-free chocolate” altogether. Cargil, for example, launched a cocoa-free ingredients range ‘NextCoa’ in partnership with Voyage Foods, a Californian start-up making ‘chocolate’ from blended vegetable oils, sugar, grape seeds and sunflower protein.
Similarly, Barry Callebaut, the world’s biggest chocolate maker, signed a long-term agreement with alt-chocolate maker Planet A Foods in November to help the chocolate giant “meet the growing customer demand for sustainable, chocolate solutions without cocoa.”
How cocoa ingredients makers pivot
While no-one is claiming these products will replace chocolate, many believe they can help fill the gap between supply and demand which, last year, reached around 500k tonnes, according to the International Cocoa Association.
The involvement of giants like Cargill and Barry Callebaut is a powerful endorsement for what is still a nascent sector. After all, it is only in the last few years that the idea of cocoa-free chocolate has emerged at all. London-based Win Win was the pioneer, launching what it claimed was the “world’s first cacao-free chocolate” back in 2022 after developing a process which mimicked the traditional process of chocolate – fermenting and roasting cacao beans – but using cereals like rice and barley instead.
While cocoa prices are now falling, Win Win CEO Mark Golder says interest in its alt cocoa products has continued to spike from manufacturers making chocolate-goods such as ice cream, cookies and cakes.
“The industry is recognizing that this is a problem which is going to get worse over the next 5, 10, 20 years,” he says. “So what we’re seeing is more and more businesses, especially the slightly bigger companies with the resources to look further into the future, wanting to start working with us to build their resilience for the future.”
This is certainly the view of many analysts who see little reason to believe there will be any major long-term relief in cocoa prices. London prices will average around £3,400 per tonne this year compared to £1,749 between 2018 and 2022, according to December forecasts from commodity analysts ING. The same forecasts highlighted the impact of ageing trees and swollen shoot disease on production.
“These are structural issues which are not going to be fixed quickly, and therefore we will need to see prices remaining above their historic norms in order to ensure we see adequate investment in supply in the medium to long term,” says Warren Patterson, ING’s head of commodity strategy.
This means cocoa farmers may be going without food, medicine, education and whatever else they used to buy with their cocoa income
Tonya Lander, lecturer in biology at Oxford University
But for all the excitement over alternative chocolates, they are still just a miniscule fraction of the $120bn global chocolate market. Nonetheless, Win Win’s Golder is not the only one who believes they could take a “significant portion” over the next 10 years as cocoa yields continue to suffer.
Nukoko is another UK-based start-up making a chocolate-alternative from fava beans. CEO Ross Newton argues that unlike other food-tech sectors such as plant-based meat which elicited huge excitement and investment before a sharp contraction, alternative chocolate has the demand ready and waiting.
“In alt-protein, there isn’t a market to match up to the hype. The difference with alt-chocolate is there’s a lot of hype and an actual problem. There is a supply deficit. It exists.”
Nukoko’s focus is therefore on building the scale and pricing strategy to be able to work with large-scale manufacturers as quickly as possible. “If I’m being honest, the crisis came a little bit early for us all,” Newton says. “But this year, ourselves and probably quite a few of others will start catching up and getting some scale to start supplying the market.”
While the likes of Win Win and Nukoko have opted to replace cocoa altogether, others are trying to produce it in a different way. A Mondelez-backed startup, Celleste Bio, is one of them, launching what it claimed was the first cell-cultured, chocolate-grade cocoa butter in October.
The product is made in bioreactors and fed on sugars, minerals, and other nutrients, creating what the company says is “not an alternative” but “real cocoa butter” which is “bio-identical” to cocoa butter extracted from beans.
Alternative cocoa makers
Another is Kokomodo, which has developed a range of lab-grown cocoa powders ranging from those high in antioxidants to others rich in aroma and is now producing “hundreds of litres at a semi-industrial scale”, according to CEO and co-founder, Tal Govrin.
The challenge facing both these companies is the strict regulations that govern their product in the chocolate heartlands of Europe. Lab-grown chocolate is considered a novel food by the EU and must therefore gain approval through a process that can take anywhere from 18 months to three years. To date though, no cell-based food has been approved by Brussels.
Price is another major factor with such technology expensive and volumes currently low. Traditionally grown cocoa powders typically cost between around $10 to $15 a kilo for mass-market products, up to over $100 per kill for premium, meaning “at the moment, we’re on a par with the premium market,” Govrin says, although she adds prices should steadily fall as scale ramps up.
Advocates of alternative chocolate say it offers key advantages over conventional cacao: reduced carbon emissions, more reliable supply, and in some cases, lower prices.
But these benefits will only matter if brands can persuade shoppers it tastes just as good as the real stuff. The risk, of course, is that people are turned off by a product which can legally no longer call itself ‘chocolate’ anymore due to inadequate quantities of cocoa.
The new formulations from manufacturers like Nestlé and Pladis only hit shelves last year meaning any sales data remains murky. A Nestlé spokesperson said sales have “remained stable” but had nothing further to say on it.
They are not in unchartered water though with treats like Wagon Wheels and Mini Rolls labelled as “chocolate flavoured” for a long-time and shoppers seemingly no less keen to throw them in their basket.
Win Win CEO Mark Golder believes no or low cocoa could even prove an advantage in the long-run as consumers grow more aware of cocoa’s environmental impact. “I think shoppers might start to proactively look for these cocoa-free alternatives because they’ll know they taste just as they’re used to but without the downsides in their pocket and to the planet.”
But the risks are not only on the consumer side. As Tonya Lander, a lecturer in biology at Oxford University highlights, the consequence of confectionery becoming smaller or less chocolatey has very little impact on a consumer’s quality of life. By contrast, for cocoa farmers a global drop in cacao-use would exacerbate the difficulties already fuelled by global economic instability, biodiversity loss, and climate change.
“This means cocoa farmers may be going without food, medicine, education and whatever else they used to buy with their cocoa income,” Lander says.
Manufacturers are clearly wary of ditching cocoa too fast or too soon. Yet further high-prices and dwindling supply could increasingly force their hand. The ultimate risk, for everyone from farmers to consumers, is that unless something major changes, real chocolate could become the preserve for royalty, once again.
