MARS, Inc: We Are Running Out of Chocolate

schwit1 writes There's no easy way to say this: You're eating too much chocolate, all of you. And it's getting so out of hand that the world could be headed towards a potentially disastrous (if you love chocolate) scenario if it doesn't stop. ... Chocolate deficits, whereby farmers produce less cocoa than the world eats, are becoming the norm. Already, we are in the midst of what could be the longest streak of consecutive chocolate deficits in more than 50 years. It also looks like deficits aren't just carrying over from year-to-year—the industry expects them to grow. Last year, the world ate roughly 70,000 metric tons more cocoa than it produced. By 2020, the two chocolate-makers warn that that number could swell to 1 million metric tons, a more than 14-fold increase; by 2030, they think the deficit could reach 2 million metric tons.

Comments

The Fix: Buy good Chocolate!

[pollarda]

I'm in the chocolate industry and own a small high end chocolate company in Utah where we make all of our chocolate from scratch (ie beans) and have been at the forefront of the American craft chocolate movement and are a founding member of the Craft Chocolate Makers of America . From what I've seen is that the big issue is that the farmers are not getting paid nearly enough. Cocoa has been a great trade good because if you keep it dry and the bugs out it will last for years. This is great for remote impoverished areas because the farmers can save their cocoa and send it out on the next mule train.

Cocoa is very labor intensive way more than you can reasonably expect and today these remote communities have roads to them. Farmers can now grow bananas, pineapples, passion fruit etc for a lot less labor and have it at port in just a few days. For this reason many cocoa farmers are cutting down their trees and replacing them with crops that are less labor intensive. Additionally the youth are looking to jobs in oil (such as in Trinidad) or in the cities.

What foods are similar to cocoa in terms of labor? Truffles, saffron, vanilla, good cheeses etc. all of which are very expensive comparatively. Nobody faults these for not being $3/lb or less

What's the solution? To pay the farmers more. Right now, Cocoa sells for approx $2800/ton and in my opinion it should be closer to $10,000 - $20,000 / ton. This means that a chocolate bar would sell for $6-10 depending on packaging. (We currently sell chocolate we make from cocoa from Chuao Venezuela where we pay $5.50/lb for the cocoa where the London market was around $1.40/lb so we paid the farmers four times the market rate.)

Don't be wooed by so called "fair trade" certification. When I see that, I know the farmers just got screwed. Why? With Fair trade the farmers get a premium of $150-$200/ton -- a price increase of 5%. On the other hand, the FT organization charges the farmers between $2500 - $10000/year for the certification and in personal experience I've only seen it at $10,000 / year. At the same time they charge $0.10/lb ($220/ton) to whoever imports it for it to maintain its FT certification and another $0.10/lb for thr use of the logos and trademarks. So FT gets $440/ton and the farmers get $200. Not so fair. Plus don't forget the farmers certification and of course the companies need to be certified too. Oh yea. The inspectors are $750/day plus travel.

So what to do? Buy good chocolate. A bar should be anywhere from $5-$15. You can't make really good chocolate without using great cocoa. You can't get great cocoa without paying a significant premium to the farmers -- often 2-4 times the NY or London terminal price. So you know they are paid well. You simply can't have a $1-2 chocolate bar after if has been run though the supply chain (stores, distributors, the factory, various cocoa brokers, etc.) and know the farmers were paid well no matter the certification.