Slashdot Mirror

← Back to Stories (view on slashdot.org)

MARS, Inc: We Are Running Out of Chocolate

Posted by timothy on from the there's-a-price-system-to-take-care-of-that dept.

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.

15 of 323 comments (clear)

  1. Good news! by Anonymous Coward · · Score: 5, Funny

    Chocolate rations have been increased to 20 grams!

  2. Panic! by mean+pun · · Score: 5, Funny

    Forget Ebola, forget IS, forget running out of IPv4 addresses, finally a real reason to panic.

    So go ahead, make the most of it!

  3. That's what she said! by __aaltlg1547 · · Score: 5, Funny

    "There's no easy way to say this: You're eating too much chocolate, all of you."

    My dentist has been telling me this for years. So has my wife. Do you think they're seeing each other?

    1. Re:That's what she said! by Anonymous Coward · · Score: 5, Funny

      I bet the dentist is drilling your wife.

  4. This is what the Free Market is for by preaction · · Score: 5, Informative

    Chocolate prices rise, people have larger incentive to grow cacao. I'm failing to see what the issue here is.

  5. Re: How are we covering the shortfall/defecit? by Anonymous Coward · · Score: 5, Funny

    Simple, the Federal Reserve just prints more chocolate.

    Cocoatative Easing they call it.

  6. The Fix: Buy good Chocolate! by pollarda · · Score: 5, Interesting
    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.

    1. Re:The Fix: Buy good Chocolate! by Anonymous Coward · · Score: 5, Insightful

      I own a small high end chocolate company, and I think chocolate should be more expensive.

      Didn't see THAT one coming a mile away. Nope. Nosiree...

    2. Re:The Fix: Buy good Chocolate! by Dr.Dubious+DDQ · · Score: 5, Funny
      "How much do you think a standard Hershey Bar[...]"

      What does that have to do with anything? We're talking about CHOCOLATE.

      (Somebody was bound to post that, it might as well be me...)

      /(adjusts monocle)

      --
      Hacker Public Radio is our Friend
    3. Re:The Fix: Buy good Chocolate! by pollarda · · Score: 5, Insightful

      I and a number of other small chocolate makers have looked at what cocoa _should_ cost. Cocoa beans IMHO should cost at least double if not three to four times what they currently do.

      Now with a Hershey's Bar, a good portion of the bar is sugar and milk. Because of this, there is very little "cocoa" (the real part of chocolate in chocolate) in a Hershey's chocolate bar. This was the big innovation that Milton Hershey made. Chocolate was too expensive and was the domain of the rich and so he in some ways invented the technique of watering it down with immense quantities of sugar and milk. If I remember right, a Hershey's bar is only 15% cocoa (not counting the cocoa butter which is added to reduce the viscosity of the added milk and sugar. I don't know what Hershey's pays for these ingredients but I can get sugar for $0.50-$0.60/lb offsets the price significantly for a bar like Hershey's since there is so much of it. But I'd bet to get the prices right you'd probably be needing to have a Hershey's bar cost at least 2-3 times what they currently do. I'd have to really dig into the numbers closely to really make a more accurate stab at it.

      Along the line of your question though, Hershey's buys some of the worst quality cocoa (of which there is a lot of) and pays prices that are close to rock bottom. So they are paying around $1.30/lb right now. There is a 20-25% loss after you remove the shell and moisture evaporation during roasting. I've tasted the grade of cocoa that they buy and it is spitting bad (ie, you'll spit it out almost immediately. Better qualities of cocoa taste significantly better. So I hope this helps a bit.

    4. Re:The Fix: Buy good Chocolate! by pollarda · · Score: 5, Informative

      Keep in mind that a 3 Musketeers bar is mostly sugar. There isn't much chocolate in it at all. There is just a thin shell of chocolate on the outside (predominately). That chocolate is very sweet. I'd bet it contains no more than 20-30% cocoa. (Our milk chocolate is 35% cocoa which is higher than most.) Most of the rest is sugar. (There is some cocoa butter which sells now for about $4.70/lb as the market is up for cocoa butter right now -- conversely to powder which is down as they move inversely to each other for reasons I've never quite understood.)

      This is one thing we have a hard time communicating to chefs. They don't always understand that very good quality chocolate is a lot more affordable than they think. The price per pound is higher -- sometimes a lot higher. At the same time, there often is very little chocolate in the chocolate dessert once you've added flour, eggs, milk, cream, sugar, etc. So they can improve the quality of their dessert --- sometimes significantly -- without as much added price as you'd normally think since the chocolate is diluted by so many other ingredients.

      Part of the problem is that there is a mindset that cocoa and chocolate are commodities in the same way that flour and sugar are rather than heavily labor intensive products that should be compared more closely to truffles, vanilla, fine cheeses, etc.all of which are typically carefully handcrafted products in much the same way that cocoa is.

      About the locally produced bar -- As I said, you can't make good quality chocolate without good quality cocoa. You can't get good quality cocoa without paying the farmers significantly more. Hence you can not have a "cheap" high quality chocolate where the farmers were paid well. This doesn't always mean that an expensive bar is made with chocolate where the farmers were paid fairly for their cocoa. We all can think of products that were way overpriced for crap. So in general you can have overly priced bad quality chocolate but you can't have under priced good quality chocolate simply because good quality beans are expensive. Pay attention to the quality --- not the price. The price though will follow the quality.

    5. Re:The Fix: Buy good Chocolate! by pollarda · · Score: 5, Informative

      I agree. Chocolate was once the domain of the rich and while Milton Hershey commoditized it by adding immense amounts of sugar and milk, I feel convinced it will some day become a specialty product once again that is more of a rare treat rather than the everyday snack.

      Here is how it works in terms of labor:
      The cocoa trees are highly disease susceptible so there is a lot more work that goes into keeping your cocoa plantation in good shape than say apples or oranges. There is a production of about 1MT / acre of cocoa per year so the land doesn't produce very much per acre as you might expect. Not all the cocoa comes into ripeness at the same time (unlike apples, oranges, etc.) so the farmer has to walk the plantation every few days harvesting each cocoa pod by hand one at a time as each pod becomes ripe. Each cocoa pod equates to about one chocolate bar and must be hand cut from the tree (not picked). The pods are then taken to a central area where they are split by hand and the beans removed and the central stalk taken out again all by hand. The beans are then put into wooden fermentation boxes (3 foot square) where they are fermented typically 5-7 days depending on variety. Each day the beans must be taken out of the boxes, clumps broken up and\ turned over, and then put back in so that they ferment rather than rot. Finally, they must be dried which takes another 5-7 days where they are put out in the sun in the morning and brought back in when it looks like it might rain or in the evening. Some farmers turn the beans every hour. The final price? $1.30/lb Let's look at pecans. The trees are a lot easier to grow, very disease resistant (comparatively) and they are harvested by a vehicle driving up to the tree, grabbing it and shaking it until all the pecans fall out and then they go to the next tree. The price? $4.50/lb if I buy it 1,000/lbs at a time.

      Given the labor economics, the amount of cocoa will reduce until the price of the chocolate goes up enough to support higher prices for the farmers. This will happen whether we like it or not. This will also continue to happen as the 3rd world countries industrialize and less labor intensive forms of jobs are available such as working oil fields, mines, and other blue collar and white collar jobs in the various cities.

    6. Re:The Fix: Buy good Chocolate! by pollarda · · Score: 5, Informative

      Probably the best widely available chocolate would be Guittard. Guittard is run by Gary Guittard and it was started by his great grandfather in San Francisco during the gold rush. I'm personally good friends with Gary and I know where they buy their beans (not all of them but enough so that I have a good sense as to what is paid and we buy from some of the same farmers.) Guittard buys some very premium cocoas (and some lower grade too.) For their premium cocoas, they pay premium prices. Gary (along with myself) are founding members of Direct Cacao an organization that was set up to promote the direct trade of cocoa with the farmers to help ensure that farmers get paid enough to keep cocoa a viable crop and to help keep quality up.

      Lindt actually owns Ghiraldelli which is funny. When you buy San Francisco Chocolate, you are actually buying swiss. I'm familiar where they get some of their beans and their beans generally aren't particularly good quality. Their Madagascar chocolate is made with some of the lowest quality cocoas from Madagascar for example -- they couldn't buy their cocoa from the better growers for example Akkeson's plantation where we, Valrhona, and many of the europoean manufacturers buy their cocoa from.

      Chocolate brands to look out for would be IMHO: Michel Cluizel, Pralus, Amedei, Domori, Valrhona (though they don't us as good cocoa as they used to). In the US, I'd look at companies such as Guittard (the big one) and smaller ones such as Amano, Theo, Patric, Rogue, Dandelion, Askinosie, Taza, Ritual, Dick Taylor, Fresco, Patomic, etc. There is a new movement in the US for craft chocolate making much in the same way the beer industry went a few years ago. These companies (and others) are at the forefront and many of their owners truly care about what they are doing and the farmers they work with. Among many of these companies is the desire to be part of the solution rather than part of the problem. I've been immensely proud to hear how the owners all want to pay the farmers more. Gary Guittard in one of our Direct Cacao meetings got up and specifically said: "We all need to pay even more to the farmers." I was so proud to be part of a movement where this was being said. The biggest hurdle is to educate the public so that chocolate isn't seen as just another commodity so that the public is willing to pay enough that we can pass that along to the farmers as we would like.

    7. Re:The Fix: Buy good Chocolate! by pollarda · · Score: 5, Informative

      There isn't much monopoly that I've ever seen. There are some huge chocolate traders and companies out there. Many have the resources to create hedges so that the market doesn't affect them in the same way it does smaller producers. However, the chocolate business is pretty competitive. There are many brokers and in country cocoa traders. If one cocoa trader isn't paying the farmers as much as another, the farmers will switch. The farmers are typically poor so they don't feel as tied to loyalty as they might otherwise and they follow the price paid. The bigger problem is simply that Hershey's (as an example) has a low-end chocolate bar that they have to run all the ingredients and final products through the supply chain all to have a bar that is $1.00 (or so --- I don't keep track of their price as I don't eat the stuff) by the time it reaches the final customer. This means that they can only offer a price so high to make the numbers work.

      So it is about educating the customer so that they will pay more. We (as a company) try to help educate the farmers and help them increase the quality of their cocoa. (Most of the world's cocoa is amazingly poor quality). If the farmers increase the quality of their cocoa, they can charge more. Hopefully, we will get to buy it when they do improve the quality. With good quality cocoa, the farmers can always charge less if they choose or if they have to. With poor quality cocoa, they can never charge more. Quality provides options for the farmers and in my experience really helps improve the self image of the farmers which is an amazing thing to see.

    8. Re:The Fix: Buy good Chocolate! by Sabriel · · Score: 5, Insightful

      Maybe you were just trying for a Funny, but that just makes it even more depressing that someone modded you Insightful.

      Because GP, as a chocolate maker, was saying that _cocoa_ should be more expensive. Does that mean the average price of chocolate would rise? Yes. Does that mean the GP's wholesale and retail price would rise? Maybe, maybe not, because they're already paying the farmers well above the typical rates.

      Regardless; when one of the "middlemen" between you and the farmers, tells you that the farmers are getting stiffed by the global system that supposedly exists to protect those farmers, you should pay more attention.