Company Insights, Flavor Insights
Dramatic headlines aside, chocoholics across the world are refusing to give up beloved chocolate flavored products. However, if the global cocoa supply continues to drop at the rate that it has been since January, chocolate may become a rare commodity in the Food & Beverage Industry as prices skyrocket. We’re giving you the latest insights on the cocoa market so you can make the best decisions regarding your chocolate flavored products in the months to come.
Origin of the Issue
Most of the world’s supply of cocoa beans comes from West Africa, with a moderate quantity also sourced from Brazil, Ecuador, and Indonesia. In fact, approximately two-thirds of the world’s cocoa production occurs in the West African nations of Ghana and Ivory Coast. Since the beginning of the year, this region has experienced disruptive weather patterns amplified by climate change and rising freight costs. A CNBC article reports that the El Nino weather phenomenon observed in West Africa this year may result in drought-like conditions that may permanently affect the yield of cocoa beans able to be produced there1.
Cocoa harvests occur only twice per year, with the “main harvest” occurring from October to March. Since it rained more than usual in Western Africa for the last few months of 2023, several plant pathogens- such as black pod disease & swollen shoot virus- were able to spread between farms more easily. Additionally, a powerful cyclone ravaged Brazil right before harvest season last year. These factors alone already threatened the overall cocoa output this year and further exasperated the global cocoa supply crisis we are currently witnessing.
Additional root causes of the cocoa crisis include the global fertilizer shortage and economic paranoia that stems from the 2022 war in Ukraine. Because cocoa is a crop that requires a significant amount of fertilizer to grow commercially, the reduced amount of fertilizer being exported greatly impacted the overall yield of existing cocoa trees before unexpected weather had an impact. Europe is also the world’s leading importer of cocoa beans. When analysts started to predict that the cost of oil, coal, and gas would spike due to the Russian invasion, chocolate makers began placing fewer orders for cocoa out of financial fear4. As soon as fear subsided, there was a boom in demand for cocoa again, but with a more limited supply than ever before.
How to Navigate the Changing Cocoa Market
As a result of the changing weather patterns and shipping challenges, the price of cocoa has spiked by more than $2,000 per metric ton since January, reaching a record high of over $7,000 according to data released by Bloomberg on March 12 and as shown in the figure below5. Since cacao trees take years to mature enough to produce cocoa beans, these high prices aren’t expected to return to baseline anytime soon. Paul Davis, President of the European Cocoa Association, estimates that it may be another 1.5 to 3 years before chocolate producers can relax again.
Source: McKeany-Flavell
While passing the cost on to consumers is one option to navigate the ominous climate of the cocoa market, it is important to consider other strategies to keep your chocolate flavored food or beverage product in line with competitors.
- Diversification: Companies should consider diversifying their sources of cocoa to different regions of the world to mitigate the risk of supply disruptions from unfavorable weather pattern changes.
- Sustainability initiatives: Engage in cocoa farmers that have sustainability initiatives in place to ensure that the long-term viability of cocoa crops is being supported.
- Market Analysis: Staying up to date on cocoa market reports every month can help companies plan accordingly and re-evaluate where costs could be reduced in other ingredients.
- Innovation: Supplement 100% real cocoa with a chocolate flavor or extract to enhance the rich, decadent profile of your chocolate product while using less of the actual commodity.
We proudly use fair-trade, organic cocoa beans to create our robust, perfectly sweet and nutty chocolate flavors and extracts. Reach out to us today for more information on our premium chocolate flavors and how Jogue can help you cut soaring cocoa costs while retaining flavor.
Resources:
1. https://www.cnbc.com/2024/02/08/cocoa-prices-surge-to-all-time-highs-as-bad-weather-hurts-west-africa-crop-yield.html
2. https://markets.businessinsider.com/news/commodities/chocolate-west-africa-cocoa-beans-supply-crunch-prices-suppliers-commodities-2024-2
3. McKeany-Flavell. “Cocoa and Chocolate Monthly Update”. 2024, Feb.
4. https://time.com/6291600/cocoa-chocolate-high-price-russia/
5. https://www.bloomberg.com/news/articles/2024-03-12/cocoa-rises-above-7-000-a-ton-for-first-time-in-new-york
Flavor Insights
The fascination with abstract, futuristic concepts has officially penetrated the Food & Beverage Industry! Flavors such as “Unicorn”, “Mermaid”, “Galaxy”, and “Starlight” were all fan favorite flavors launched in 2023, and the trend is expected to continue. Between the Great Northern Solar Eclipse happening on April 8 and the first crewed moon mission planned for later this summer, space-themed flavors are projected to be more popular than ever before this Spring!
Additionally, new innovations in the food & beverage space (edible glitter, bold colors, unusual textures, eye-catching layers, etc.) are likely to continue to capture the attention of children in 2024. Starbucks, Little Debbie’s, and Snack Pack have all witnessed success from launching unicorn flavored frappuccinos, snack cakes and layered puddings, respectively. Teens and adults have even caught the unicorn curiosity bug: Bang Energy launched a “Rainbow Unicorn” flavored energy drink that went viral on social media.
When it comes to the world of fantasy flavors, the options are endless! While standing out among the landscape of increasingly unique flavors may seem overwhelming, our team of flavor experts have simplified the fantasy flavor creation process into 3 simple steps.
Step 1: Research Your Customer Base
Although this may seem like the obvious first step, it’s arguably the most important. For example, companies marketing towards an adult demographic- such as Coca-Cola and Torani- likely experienced the success they did with fantasy flavors from space-themed products whereas brands like Lucky Charms and Little Debbie’s strategically went for a kid-centric approach that involved flavor concepts such as “unicorn”, “mermaid”, and “fairy dust”.
This first step is admittedly more so about marketing than it is about flavors, but peaking consumer interest to set expectations of a mind-blowing flavor experience is pivotal to a product’s success in the market. Before launching any line extension project, knowing your customer base well enough to cater to their desires will lead to fantasy flavor success!
Step 2: Define a Flavor Profile to Match the Concept
Creativity is key in this step. Fantasy flavors don’t come attached to preconceived expectations. However, it’s fascinating how some of these flavors become defined over time. The “Moose Tracks” ice cream flavor is now almost universally accepted as being a vanilla flavored ice cream with a chocolate fudge swirl riddled with mini peanut butter cups shaped like a moose hoof. Although Moose Tracks is a less abstract concept than several of the fantasy flavors launched within the past year, it still may not be long before we start noticing consistencies among several of the most popular ones hitting the market.
For the creators of Torani’s new Galaxy Syrup, “galaxy” tastes like cotton candy and blue raspberry. Coca-Cola’s Starlight Coke is described as a mix of raspberry and s’mores type flavors. Little Debbie’s Unicorn Snack Cakes are a blend of ultra-sweet cake batter type flavors, strawberry, and lavender. Meanwhile, the unicorn flavor was interpreted very differently in Starbucks’ Unicorn Frappuccino- which is described as having a sweet crème flavored base blended with mango and sour blue raspberry flavored syrups.
Narrowing down the scope of options by defining a flavor blend that not only works well as a seamless combination but also somewhat reflects the overall feeling of the fantasy concept chosen in Step 1 is easier said than done. Inspiration can be taken from anywhere, but a few of our favorite ideas are below:
- “Shooting Star” Sparkling Water – Mango + Lemongrass + Ginger
- “Fairydust” Cupcakes – Strawberry + Dragonfruit + Cotton Candy + Crystallized Wild Honey
- “Black Hole” Pasta Sauce – Black Sesame + Black Garlic + Black Truffle
- “Electric Thunder” Energy Drink – Sour Apple + Yuzu + Apricot
- “Magical Cloud” Ice Cream – Cake Batter + Toffee + Blue Raspberry
Step 3: Refine
As you can imagine, it’s easy to go overboard working with limitless flavor possibilities. There are so many fun flavors that can be thrown together to fit the fantasy concept. If it’s pulled off well, a fantasy flavor is bound to make headlines. However, for every successful “unicorn” food or beverage on the market, there are likely at least five that flop.
Turning to flavor scientists to help masterfully balance competing flavors to result in a novel flavor experience is key to helping you refine a fantasy flavor. If you plan to jump on the trend this month, be sure to choose premium made-to-order flavors that will be sure to set your fantasy flavor project above the rest!
References
- 25 food and drink trends you’ll see everywhere in 2024 – delish. (n.d.). https://www.delish.com/food/g46170754/restaurant-food-drink-trend-predictions-2024/
- Zigoris, J. (2023, November 23). We tried Torani’s 2024 syrup flavor of the year, and we have thoughts. The San Francisco Standard. https://sfstandard.com/2023/11/22/bay-area-torani-syrup-galaxy-flavor-year-2024/
- Quittner, E. (2022, June 29). What does unicorn flavor actually taste like?. Food52. https://food52.com/blog/27502-unicorn-flavor
- Starbucks new color and flavor changing unicorn frappuccino. (n.d.-b). https://stories.starbucks.com/stories/2017/starbucks-unicorn-frappuccino/
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