You could say the trouble started in early November, when media outlets began hyping a possible cocoa supply deficit in 2020 brought on by Ebola in West Africa and China's newfound craving for chocolate. Mars Inc. and Barry Callebaut AG, the world's largest chocolate makers, warned the gap between how much cocoa the world wants to consume and how much it can readily produce will swell to 1 million metric tons. By 2030, the shortfall could grow to 2 million tons. And so on.
Despite the dire warnings, however, chocolatiers and bean-to-bar chocolate makers--companies that process cocoa beans in-house--remain split on whether to worry. In fact, it seems no two companies share the same sentiment.
"I think it's way overblown because Brazil is making huge investments in growing new resources," says Katrina Markoff, founder and CEO of Vosges Haut-Chocolat. The International Cocoa Association called the scare "overstated" and kindly reminded everyone that cocoa production responds to changing prices, so it can't be assumed that supply will stay flat or decline.
Yet even though there are signs that cocoa is doing just fine--and finding a new home in South America--small business owners are paying the price for all of the hullabaloo. "This is a very thin market, only $5 billion," says Kevin Burke, a food analyst with Trinity Capital LLC. And because it's so small "financial guys can disturb it easily," Burke says, which causes prices to slowly creep upward. He adds that although supply remains steady and the market has proven that out, the chocolate panic has caused businesses to second-guess prices and how much chocolate to use in their products.
"What I'm used to--and what is normal--is prices increasing gradually over time, and that's all I've ever experienced," says Chuck Siegel, longtime owner of Charles Chocolates in the Bay Area. "It's definitely affecting us."
Over the past year, Siegel's company, known for turning out small batches of treats, has seen the price of chocolate rise twice--once around late August, when it jumped between 8 and 15 percent, and again in October, when it rose between 8 and 10 percent. For someone who prides himself on buying the highest quality chocolate, Siegel refuses to budge on prices--or cut back ingredients. "Mine is a completely product-driven company, so I can't compromise the quality of the product," he says. "We can't buy cheap nuts without our customers being disappointed." Charles's chocolate bars range in price from $5 to $8, and a box of chocolates starts at $24.
Mark Eisenberg, a confectioner with Treat Street who designs candies sold by retailers such as Target, also worries about rising prices. "How do we make and sell to Target and CVS and maintain the price point?" That's the question he's been asking himself all year. "We had a chocolate egg that retailed for $3 last year, and we don't want to increase the price," he says. "The only thing we can do is reduce the weight of that chocolate."
To do so, Eisenberg has gotten creative with his ingredients. For example, a candy egg for next Easter may look the same size as last year's, but contain more crispy rice or caramel filling than chocolate. "There's just not enough chocolate to go around," he admits.
Katherine Clapner, a 20-year pastry veteran whose Dallas outfit Dude, Sweet Chocolate sources exotic cocoa worldwide, takes a decidedly different, if not more brazen stance. "You just find your ebb and flow and try to be better at what you do, because it's not just the chocolate," she says, contrasting her business with bigger players like Mars. "I am only flavor-driven and that starts with every single thing that I do, from the butter to the sugar to the chocolates."
And she won't change a recipe. "I won't compromise the chocolate because it's Dude, Sweet Chocolate, not Dude, Sweet Confections. Everything is about keeping the customer happy--and me, actually. If you crack open that door just a little, you can't ever shut it. It's already done."
For now, Clapner isn't concerned about rising prices in her business. In fact, they're what she expects. "If you think you're going to go in and become a chocolatier and it's going to be an inexpensive venture, you're crazy," she says. "And it's not just the chocolate. It's the butter, it's the sugar, it's the dairy, it's the boxes, it's the labeling, it's the tags--all of those affect what chocolatiers do."
"I remain ever hopeful," she says. "If people are buying, I'm producing."