PPB January 2015

THINK

70 •

PPB

• JANUARY 2015

FAST FORWARD

SNACK ATTACK

THINK

THE WORLD’S VORACIOUS APPETITE FOR CHOCOLATE IS SOUNDING ALARM

BELLS, BUT INDUSTRY CHOCOLATIERS AREN’T WORRIED.

BY TAMA UNDERWOOD

RESS REPORTS ARE ACCUSING chocoholics of devouring the world’s cocoa supply faster than it can

grow. And some in the chocolate business are predicting price hikes and global supply shortages by 2020.

While it’s true that demand is rising while cocoa producers are simultaneously battling droughts and crop-

killing diseases, the International Cocoa Organization says it’s too soon to hit the panic button. It claims its

data doesn’t support projected shortages in 2020 and adds that the most recent cocoa season, which ended September

2014, experienced a 10.5-percent gain over the prior year with record production in two countries: Ivory Coast and Ghana.

Industry chocolatiers aren’t worried either, but they say the chocolate market is evolving due to developing nations

increasing their cocoa demands and U.S. customers eating more and seeking out higher-quality varieties.

“We have seen an increase every year for chocolate,” says Ken

Strong, CEO of Blaine, Washington-based supplier Chocolate

Chocolate (UPIC: CHOCCHOC). “The

worldwide-demand increase is more about

countries like China that come on stream

with buying power and desire for ‘luxury’

items. In North America, there is a growth movement to higher-end

chocolate.”

At Freeport, New York-based supplier Chocolate Inn/Taylor &

Grant (UPIC: CHOCINN), customers are loading up on dark choco-

late for its health benefits. “We’re also seeing a surge in our truffles,

milk and dark sea-salt caramels, and our ’smores,” says its president,

David Miller.

Even as orders swell, both industry experts say milk chocolate still

makes up the lion’s share of purchases.

The two also agree that price surges and product shortages aren’t

anything industry distributors need to worry about. Chocolate Inn

manufactures its own chocolate and controls costs by hedging its bets

in the futures market; Chocolate Chocolate purchases its custom-

blended chocolate from Europe, managing costs by adjusting opera-

tions and looking for engineering efficiencies, such as robotics.

“We don’t see any supply issues for the foreseeable future,” Strong

assures. “Prices are holding steady in 2015 and, in fact, down some

from 2014 highs. …Markets have a way of supplying demand, so

enjoy your chocolate and relax!”

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