The cocoa powder crisis is creating exciting opportunities for growth and innovation within the bakery industry. At Kudos Blends, we embrace challenges and are proud to offer a baking powder solution that helps address this issue. Our innovative ZEUS™ C120 baking powder allows manufacturers to reduce cocoa usage without sacrificing the desired cocoa flavour and appearance, delivering a cost-effective solution while maintaining product quality.
Chocolate cake, a top-selling treat worldwide, relies on its star ingredient: cocoa powder. Yet, this beloved ingredient is at the heart of a mounting challenge for the food industry. Between June 2023 and June 2024, cocoa powder prices skyrocketed by over 185%, with The International Cocoa Organization (ICCO) pricing reaching £9080 per tonne in April 2024. Although prices dipped briefly, providing momentary relief, supply fears have re-emerged, with extended dry spells in key producing regions, pushing costs back to over £8697 per tonne at the end of December. This leaves our industry wondering: will the cocoa supply stabilise soon, or are we facing a prolonged disruption?
Thankfully, despite these pricing challenges, there is a way forward. A simple change of baking powder can help mitigate rising costs without compromising product quality, allowing the removal of costly cocoa while maintaining the chocolatey look and flavour that customers love. This allows bakery manufacturers to stay ahead of the curve and keep chocolate-based products at the heart of their offerings, even in challenging times. All of this supports manufacturers in avoiding increasing product costs or taking the cost increases on themselves which will strain profit margins.
The Drivers Behind the Price Surge
The spike in cocoa powder prices can largely be attributed to a combination of unfavourable weather conditions. Cocoa production is highly sensitive to weather patterns. Erratic rainfall, prolonged dry spells, and unseasonal flooding have severely impacted crop yields.
The cacao tree, which produces cocoa beans, requires stable, predictable climatic conditions to thrive. Extreme weather events not only reduce the immediate harvest but can also damage trees, limiting future production.
On top of production issues, strikes, political instability and transport disruptions in top cocoa-exporting areas have complicated the problem.
Recovery: A Long Road Ahead
Cocoa’s journey begins with planting a cocoa seed. During germination the seed sprouts, and over the next 3-5 years, it grows into a mature cacao tree capable of flowering and producing cocoa pods. These pods house the valuable cocoa beans which can then be harvested and undergo the process of bean to powder.
This time-consuming process means that the recovery from these cocoa challenges is not immediate. With the cacao tree taking 3-5 years of good, consistent weather to mature and produce its first beans, the damaged plantations cannot bounce back quickly. Additionally, rebuilding sustainable agricultural systems in regions affected by severe weather or conflict requires substantial investment and time.
While cocoa prices may eventually stabilise, the ripple effects of current shortages will likely persist for several years. For manufacturers, this could mean higher production costs and tighter profit margins. For consumers, it may result in more expensive chocolate-based products, from cakes to confectionery.
Exploring Alternatives
Due to the rising cocoa prices, manufacturers are forced to explore substitutes for cocoa powder. Some examples include malt extract and carob powder. While these alternatives can reduce dependency on traditional cocoa, the can have an impact on the products appearance and flavour. These adjustments may also lead to customer dissatisfaction if the end product does not meet expectations, posing further challenges for manufacturers attempting to strike a balance between cost and quality.
Here at Kudos Blends, our expert team of chemists and bakers have developed a baking powder, ZEUS™ C120, which can mitigate the impact of rising cocoa prices by allowing manufacturers to reduce the level of cocoa in their recipes without compromising the chocolate colour and flavour customers know and love. Read our full case study using ZEUS™ C120 in chocolate cake here.
The Bottom Line
Chocolate cake will always remain a bakery favourite, but its affordability could shift as the cocoa market faces ongoing challenges. Awareness of these issues among consumers, manufacturers and policymakers is crucial to finding sustainable solutions. With proactive measures, the chocolate industry can navigate this turbulent period and continue delivering the indulgence so many love.
At Kudos Blends, we are committed to providing solutions to these challenges by offering a reliable and cost-effective alternative. Our innovative products ensure consistent quality and peace of mind, empowering you to focus on creating exceptional baked goods.
