WTF is going on with cacao prices?!?

Something extraordinary happened with something ordinary this month; We received a quote on a new batch of cacao. What is cacao? It’s the base ingredient for all chocolate, harvested from a tree. Now we buy cacao all the time. But so incredible was the increase since Nov23 that I decided it worthy of a blog post.

But, to roll it back. Why is this happening? Did you know it was? Or did you think chocolate was just yet another food seeing price hikes? (I don’t blame you for thinking that. It’s how I feel a lot of the time buying things in the supermarkets too). Most of you will have seen my wonderful wife and co-founder on Sky News in March, talking about rising cacao prices. Historically cacao has traded at between £2k-£3k per metric ton for the last 30+ years. This month it smashed the £10k barrier. I obviously don’t have to tell you what that means for all chocolate businesses, big and small. And what it can/is doing to chocolate prices. The price rise is being primarily driven by global shortages. Cacao is a difficult crop to grow at the best of times, particularly as it's very sensitive to nature’s elements. And in many countries where cacao is grown, heatwaves, droughts, and/or floods as causing real issues for farmers. Most affected is Africa, where heatwaves have simply decimated crops. And we’ve ended up with a global shortage of around 10% less output this year. To make matters worse, Wall St. traders have also been cashing in, with even my wife’s uncle getting a call asking if he wanted to invest in cacao because it is trading so ‘strongly’ right now. The bubble will burst by the way, so I don’t really advise doing that.

For chocolate makers, it’s about riding the wave. Big ships ride out the waves better in a rocky sea. So, sadly, I have no doubt the big companies will be fine. And they’re the ones going around buying all the cacao up at the moment, making it even harder for smaller businesses to compete. And it’s the smaller businesses that will go. The ones that can’t afford to buy a year's supply in one go to protect operations. Or can’t stomach the price increase. And what’s doubly sad is that it’s the big companies that have caused this problem. They have forced the price of cacao down for so long that the farmers can’t afford to invest sustainably in protections from climate change for their crop. Sad, but true.

Most of you who’ve met me will know I’m on a bit of a personal crusade to educate people that the VAST majority of chocolate companies, big or small, traditional or vegan, do NOT make their own chocolate. The world’s biggest chocolate companies (think Callebaut, Cargill, etc.) either make the recipe for the brands that are big enough, or they produce vast quantities which people buy off the shelf, melt, and call it their own. Now this hits us very hard because just a few powerful companies basically gobble up supply, and go straight to the head of the queue. We get zero influence over the price and get told there’s not enough to go around. It then hits extra hard because of how much cacao we use. A sad fact is most dairy-free/vegan brands’ products are called ‘choc’ bars, so-called because they don’t meet the legal definition for chocolate, most often due to a lack of cacao (chocolate) in their chocolate. Our Smooth & Creamy recipe demands we use 49% cacao, and so, we use more of the good stuff in our bars. But when the cacao price is doubling price every 6 months, it hits us extra hard.

So, what does this all mean for you, our lovely customers? Well, in the short term, we hope not a lot. You’ll still be able to get hold of chocolate in the shops. Though, to cut the bulls**t, probably price rises. You’ll also probably see lots of shrinkflation/skimpflation going on too, though definitely not from us. As for us, we’ve managed to secure enough cacao to see us through for a good chunk of time, so we’re not going anywhere. In the meantime, we’re very grateful for all your support. So thank you for that, and please continue to enjoy the fruits of our small family Undairy chocolate business.