Rebalancing Cocoa in Confectionery Products

The cocoa sector is facing a crisis. Cocoa prices have been on a rise for a while mainly caused by reduced yields and diseases. This is affecting the sweet business and urges manufacturers to look for ways to balance costs and taste, besides thinking about sustainable supply chains in the future.

“Plagued by crop losses, cocoa is now trading at an eye watering $10,000 a ton, representing a 400% compared to last year.” [1]

Discover how Symrise can help reduce cocoa in your cocoa-based products like vegan chocolate and drive cost savings and sustainability without compromising on taste.

[1] Foodnavigator.com, ”Cocoa crises hits chocolate: which companies can weather the storm financially?” April 2024

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Navigating the new reality for the cocoa confectionary industry.

In today's dynamic market, manufacturers face unprecedented challenges when it comes to cocoa confectionery products. Rising cocoa prices, driven by climate change and crop diseases, are squeezing profit margins. Very often, this leads to higher prices for the final products. At the same time, consumers are becoming more environmentally conscious and savvy about product changes like shrinkflation.

Manufacturers of cocoa confectionary products, such as chocolate and vegan chocolate alternatives, are facing a pessimistic outlook when it comes to the cocoa market. Tight supplies and climate changes are impacting the cocoa market and fuel price volatility, making strategic planning for producers challenging.

“Global cocoa production is down nearly 11% this year”[2]

As the production in the leading regions of West Africa has declined tremendously, this affects local smallholder farmers, too, make them unable to invest in their lands, replace old trees or afford fungicides and pesticides, and consequently reduce yields.[3]

[2] Mintel GNPD, ingredient watch cocoa, May 2024 | [3] Mintel GNPD, ingredient watch cocoa, May 2024

Explore the challenges impacting chocolate production

SUPPLY CONSTRAINTS

Climate change and diseases like the swollen shoot virus are reducing cocoa yields, leading to a significant surge in global cocoa prices.

 
INCREASED PRODUCTION COSTS

Higher expenses in labor and transportation are adding to the financial burden on manufacturers.

ENVIRONMENTAL IMPACT

Consumers are demanding eco-friendly products with a lower carbon footprint.

 
ETHICAL SOURCING

There is heightened scrutiny on sourcing practices, with regulations like the European Deforestation Law affecting cocoa procurement.

AWARENESS OF SHRINKFLATION

A vast majority of consumers notice when product sizes decrease but prices remain the same, leading to feelings of mistrust.

 
DEMAND FOR TRANSPARENCY

Shoppers prefer brands that are open about their practices and contribute positively to social and environmental causes.

EU DIRECTIVE 2000/36/EC

This regulation affects the composition and the labeling of cocoa and chocolate products in EU, especially when introducing flavorings to compensate for reduced cocoa content

83% of Americans have noticed shrinkflation and
79% feel cheated when they notice it.

Ipsos, Americans are noticing shrinkflation, and they’re not happy”, June 2023

As consumers are getting wiser when it comes to shrinkflation, the strategy of selling less volume for the same price does not offer a proper solution for producers.

To overcome availability, sustainable and price pressures, manufacturers need to find ways to reformulate cocoa-based products. Symrise is your partner to navigate amidst these macro trends and find the right approach to create vegan chocolate products without compromising on taste. We offer expert guidance to help you implement cocoa reduction effectively.

By embracing cocoa reduction, you’re not just being cautious of your margins – you’re building a sustainable future for your brand and meeting the evolving demands of conscious consumers.

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Innovative Solutions: Reducing Cocoa without compromising Quality.

Consumers will react to higher prices by cutting back. This will have an immediate effect to the confectionery market as cocoa is main ingredient for many applications.

"Cocoa bean shortages will create demand for cocoa ingredient alternatives." [4]

[4] Mintel GNPD, ingredient watch carob as a cocoa alternative, November 2024

To ensure profit margins and equally ensure consumer purchase power, it’s crucial for manufacturers to find innovative solutions. Cocoa reduction emerges as a strategic one to overcome the crises.
However, cocoa and cocoa butter have unique properties when it comes to mouthfeel and taste. Hence, mimicking chocolate flavor and main the beloved and indulgent taste, consumers love, is challenging.

Additionally, regulatory framework limits the possibilities for manufacturers to reformulate chocolate products. [5]

[5] Mintel GNPD, ingredient watch cocoa , May 2024 & EU Directive 2000/36/EC

Facing the most prominent challenges, cocoa reduction emerges as a strategic solution:

With a dedicated team of confectionery experts, Symrise is the right partner to overcome the current cocoa crises and create a sweet and positive outlook for manufacturers. We ensure great and indulgent cocoa taste, and manage sustainability and cost efficiency, and can help you to navigate regulatory guidance.Susanne Spiller, Category Director Confectionery

Partner with Symrise for tailored cocoa reduction strategies in your product development. We offer expert guidance to help you implement cocoa reduction effectively:

  • Customized Taste Solutions: Maintain the rich flavor your customers love with our natural taste enhancers.

  • Technical Expertise: Accelerate product development with support from our seasoned technical team.

  • Regulatory Navigation: Confidently bring your products to market with our regulatory insights.

Are you ready to lead the market with sustainable and cost-effective cocoa confectionery products?
Let’s embrace cocoa reduction together, be cautious of your margins and building a sustainable future for your brand and meeting the evolving demands of conscious consumers.

 

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