Innovation and sustainability are key to ensuring the future of the chocolate industry

Climate change is wreaking havoc on cocoa production. Since the start of last year, cocoa prices have risen by some 400%, as yields were hit by extreme weather. The profound impact of climate change on cocoa yields — crucial for chocolate — became more apparent at the start of this year, putting the livelihoods of millions of farmers, and the sustainability of the global chocolate supply chain, at stake.

This has coupled with rising anxiety among consumers as they grapple with higher costs for their favourite chocolate products. Whether as a key ingredient in confectionery or as a common derivative for skin care products and cosmetics, cocoa remains a significant global commodity.

Demand for chocolate is expected to increase, despite the complex challenges threatening the sustainability of the cocoa industry.

While the supply of cocoa is entangled with complex challenges that span environmental, social and economic dimensions, the impact of climate change is becoming more apparent. Farmers in West Africa faced major challenges earlier this year with crops unable to withstand the drastic changes in weather and the rise in plant diseases. With the El Niño expected to persist this year, we can expect farmers in this region and other key cocoa-producing countries to continue facing similar challenges, more frequently.

It’s already been predicted that there will be a higher deficit in cocoa production this year, with global production projected to decline by -14.2% or 4.332 million tonnes, according to the International Cocoa Organization (ICCO).

To meet the insatiable global demand for chocolate without contributing to the escalating climate crisis, we are seeing some farmers implement climate adaptation strategies such as planting improved cocoa varieties and increasing pesticide and fertilizer application, but others are still struggling without adequate knowledge or resources. Even if they are able to implement these strategies, the food and beverage industry is being compelled to embrace new innovations to replace cocoa.

Many chocolate makers are now seeking alternative ingredients that can mimic the cherished flavours of chocolate — and a number of start-ups are stepping up to deliver key ingredients to the sector, in a sustainable way.

The socio-environmental challenges of cocoa production have pushed innovators to experiment with alternative ingredients, with promising results.

Take the case of Nukoko, for example, a UK-based startup producing cocoa-free chocolates using fermentation technology. The founders developed a way to create key chocolate flavour compounds from the fava bean, an abundant and cost-effective raw material typically grown in temperate regions. This bean is also commonly used as a rotational crop in agriculture, enabling better soil health and reducing the need for fertilizers. Supported by agri-food focused venture investors such as The Mills Fabrica, Nukoko is scaling its manufacturing process to create impact at an industrial scale, selling to food and beverage manufacturers worldwide.

Then there’s The Supplant Company, a foodtech that turns agricultural side streams like corn cobs, husks and shells into ingredients like sugar alternatives and flour that, used effectively, can increase global sugar and flour production. The Supplant Company’s blend of sugars made from agricultural side-streams not only tastes like sugar, but is lower in calories, prebiotic, low-glycemic and gluten-free. This upcycled sugar is being used to manufacture chocolate bars that replace cane sugar for a more innovative, sustainable and healthier option. To put the potential of this alternative into perspective, if The Supplant Company’s sugar were to replace enough cane sugar to offset the need for deforestation (470,000 tonnes/year), it could result in 2 billion tonnes of water saved — equivalent to the total water consumed in New York City over 18 months.

While embracing these innovations, it’s important to take a nuanced approach and recognize the human element. With a majority of farmers living in developing countries, we must protect and help to pivot the livelihoods of the millions of farmers who rely on cocoa production. They must be given adequate support to diversify production and shift to other high-yielding, resilient crops.

This encourages us to look at the problem at a systemic level. An effective solution will rely on and involve collaboration among stakeholders from the entire ecosystem.

Innovative startups such as the above are spearheading a transformative shift towards a more sustainable and resilient chocolate industry. But the shift can’t rely on these startups alone. Not only do we need investors to deploy capital to push for bolder research into new innovations, but consumers must be willing to experiment with similar ethical and greener options.

If consumers take the lead, we can expect brands to follow suit and meet their growing appetite for more sustainable food choices. Lastly, farmers, who are at the forefront of production, must be part of the solution — ensuring a stable and sustainable future of chocolate for communities worldwide.