A Love Affair? How America’s Insatiable Appetite Is Inspiring Innovation In The Chocolate Sector

Ten years ago the outlook for a favorite American sweet was horrible. Hot headlines appeared: «Climate change could melt chocolate production ”and“ Lack of cocoa could lead to rising chocolate prices ”. The world’s best cocoa producers have rushed to address the issue of cocoa performance and sustainability.

Despite the fact that forecasts of cocoa supplies did not come true and the market appeared cocoa oversaturation, there are still many problems. By 2050, researchers predict that 90% of countries that grow cocoa in West Africa will become unfit for this crop. Today, about 60% of the world’s cocoa comes from West Africa, and the region is affected by climate change, poverty and the aging of cocoa trees.

At the same time, Americans have an insatiable love of chocolate; it is twice the sales of non-chocolates and reached a record $ 29 billion.

Both startups and multibillion-dollar food giants are looking for new trade and technology methods to find more socially equitable and environmentally sustainable ways to enjoy our country’s favorite delicacy. Just for Valentine’s Day, here’s a selection of the major innovations in cocoa.

Rethinking the specialty of the cocoa trade

Most of the world’s cocoa is traded on the commodity market. This has historically caused deep poverty and destruction of the environment due to low prices. Despite years of multibillion-dollar commitments to the chocolate industry, there is virtually no transparency as to how much money is returned to farmers, and poverty persists.

Farmers return only part of the price of goods. Emily Stone, founder of Uncommon Cacao, shares: “Most farmers earn 20-40% below the world market price, even if they sell dried cocoa.”

Uncommon Cacao is a cocoa trader that was founded in 2010 to help new branded chocolate brands get high quality cocoa. The company has pioneered the concept of transparent trade for the cocoa industry.

Stone explains: “Transparent trade is verifiable, prices are published for each transaction involving the purchase of cocoa along the value chain, including information on who produced cocoa and where. This means we do business differently than any other trader; we publish all prices and margins throughout our value chain. ”

This leads to higher farm prices for farmers and long-term trade relationships with brands such as TCHO and Taza Chocolate. Uncommon Cacao cooperates with 5,000 farmers in 12 countries and supplies cocoa beans to chocolate companies for processing into chocolate.

Inaru Cacao is a vertically integrated premium chocolate brand in the Dominican Republic. The company goes a step further as a trader, processor and chocolate maker. Founders Janet and Eric Lyrian in their study found that the price of a farm did not reach cocoa farmers at all, which inspired them to start a business in 2018.

Inar’s model is unique. They directly contract with farmers and they share with farmers 3% of their profits. The duo is working with the non-profit organization Terra Genesis International to transfer farmers to regenerative farming. Inaru processes cocoa locally to reduce carbon exposure and save profits from chocolate production in the country.

Chocoloney Tony is causing changes in the mainstream

Tony’s Chocoloney was founded in 2005 with the goal of being 100% slave-free in the supply chain. This business, worth more than $ 110 million, buys cocoa from West Africa, where most of the world’s cocoa is grown. The company draws on the most pressing issue in West African supply chains – poverty and child labor.

Chief Operating Officer Pascal Baltussen shares: “If we just ignore the problems in West Africa or disconnect from this region, we will never solve the problem, so we go where there are problems. These are the regions where the most common problems are cocoa – poverty, child labor, deforestation. We could get our cocoa elsewhere, but for that reason we chose here. To be able to bring structural change to the sector. ”

The company recently reported cases of child labor in its supply chain. According to the University of Chicago, 45% of children living in cocoa-growing regions have been involved in child labor. In the supply chain Tony’s Chocoloney independent report, verified by PwC and ICI, showed that the rate fell to 3.9%. The company pays subsistence income to farmers and has implemented systems of control and elimination of child labor in the cooperatives with which it cooperates. This is one of the few examples of complete traceability of supply chains related to child labor reporting in the cocoa industry.

Their goal is to change the industry, and their search principles are open source, which means anyone can use them. The result? Now 22% of chocolate bars on the shelves in the Netherlands follow the Tony’s standard.

Growing cocoa in New Jersey

Cocoa is traditionally grown in the equatorial belt around the world, 10 degrees north and south of the equator. Late last year, Cargill and AeroFarms announced a partnership to grow cocoa indoors in a greenhouse in New Jersey.

According to Cargill Cocoa Europe Managing Director Nils Boette, the initiative will “explore ways to increase cocoa bean yields and develop more climate-resilient agricultural practices.” He says the company is the first to research cocoa in a fully controlled environment.

The goal is twofold: to conduct research in a controlled environment to better understand plant genetics and traits that can lead to more sustainable cocoa trees, and to develop a supply chain that could potentially complement cocoa production in niche markets.

Boetje shares: “This is a bold experiment, but we believe it can provide a new understanding of optimal cocoa production that will lead to faster tree growth and higher yields, and accelerate the development of varieties with increased resistance to disease and insects or even help reveal full the taste and color of cocoa beans ”.

Chocolate without cocoa beans

Fermentation technologies have existed for millennia (beer, anyone?), But have found new applications, from the production of imitation meat and seafood for baby formula.

Enter the chocolate. The German company QOA uses a developed strain of microbes to mimic cocoa, the main ingredient in chocolate. Their goal is to become “Oat Chocolate”. Co-founder Maximilian Marquart says: “QOA has developed a clear fermentation platform comparable to how beer is brewed. Instead of cocoa, we ferment regional natural food by-products to create the same taste and texture that we all love in chocolate. ”

The company completed a $ 6 million round of funding in late 2021. The founders are aiming to appear on cocoa-free chocolate shelves by next year, and by 2035 their goal is to replace chocolate with QOA in mass-market products around the world.

California Cultured is also looking to replace cocoa beans, but by a different technology. The company produces cell-grown chocolate using plant stem cells, an approach that founder Alan Pearlstein calls “a cross between pure meat and vertical agriculture”. They focus on the lucrative cocoa flavanol industry, a compound that is naturally found in cocoa and is said to have many health benefits.

These technologies are in the early stages of development and have not yet demonstrated commercial scalability.

Expanding home innovation

In this series of innovations, chocolate is noticeably lacking in chocolate that is grown at home or comes from countries where cocoa has been domesticated for over 5,000 years.

Janet and Erica Lyriana, sisters who founded Inaru Cacao, share: “We started Inaru because we really believed it was incredibly important for us to bring our skills and knowledge to an industry and country that we believed would benefit greatly from our thinking and skill set. Our parents have always made sure that we understand that what is holding back the progress of the country, and especially the Dominican Republic, was not a lack of natural resources or ingenuity, but a lack of young people ready to return and be what they learned. a country for innovation. We felt that we were really called to return to the homeland of our parents, to really return the value we received from such a rich culture. ”

Local solutions for climate-sustainable and socially equitable supply chains are essential to secure the future of cocoa and agricultural products. Lyrian’s sisters lead the charge. They believe: “To guarantee the effect, quality and financial capabilities, you need to manage this, not delegate.”

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