Learn about the world’s $100 billion chocolate industry
Satisfying the world’s sweet tooth makes a sweet profit. Believe it or not, chocolate making is a $100 billion worldwide industry. With businesses ranging from community-based chocolatiers to large corporations, the chocolate farming, production, and distribution establishment is varied and complex.
Global demand for chocolate: the numbers
According to the World Cocoa Federation, more than three million tons of cocoa beans are consumed annually. Individual consumers in the U.S. and Europe alone consume 11.5 pounds of chocolate each year on average. As new markets for chocolate emerge, the demand is on the upswing. Research firm Euromonitor, between 2010 and 2015 profits rose by 13 percent to reach $101 billion.
What companies make the most chocolate? The largest producers in the world include corporate leaders like Kraft Foods, Mars, and Nestle. They typically farm cocoa beans in the tropical climates of Latin America and Africa, close to the equator.
Though holidays like Halloween, Easter, and Valentine’s Day prime the demand for chocolate, some industry experts show cause for concern. Chocolate’s sweet rise may not last.
Healthy lifestyle focus may affect the market
Health concerns are one factor that could affect the demand for cocoa. Customers worried about their weight, sugar intake, and carb intake may choose to cut back on chocolate as part of a healthy diet. One way the industry is looking to counter this is through education about health benefits found in certain types of dark chocolate.
The growth of the cocoa market may be impacted by consumers’ focus on the ethics of how some chocolate is made. This includes concerns over child labor and modern slavery practices. Cocoa farmers, who don’t make much of a profit from their production due to pressure to keep the price of cocoa down, take advantage of poor families who need to send their children to work at an early age. The pay is low and, in some cases, it has been documented that children are fully “sold” to cocoa plantations by relatives or traffickers. Typically between the ages of 12 and 16, they work in harsh, dangerous conditions.
Another ethical concern is the environmental impact in the areas where cocoa is grown. Pesticides, agriculture techniques, and general farming conditions may negatively impact land that has been thriving in the area for centuries.
Coca wholesalers and manufacturers are working together to address these issues. Many are taking care to only purchase cocoa that has been ethically produced by farmers and workers who were fairly paid. They use the fair-trade label to ensure that their products stand out in a crowded market and are more appealing to conscientious consumers craving their chocolate fix.
The impact of increasing production
Also weighing on the industry is a recent surge in cocoa production in West Africa. This is particularly true in Ghana, the second larger producer of cocoa on the Ivory Coast. If demand drops and supply surges, cocoa prices are likely to fall.
This factor may be tempered by changing weather patterns across the globe, with temperatures expected to increase by as much as 2 degrees Celsius in tropical climates. This would be too warm for the delicate cocoa trees, which have already been seen to be stressed due to lack of water as land becomes drier in the heat. Additionally, trees would be susceptible to damage from increased insect populations connected to warmer temperatures. With this likelihood on the horizon, some farmers are already switching to other crops.
Predicting cocoa’s future
It is not easy to predict the future for cocoa. All factors considered, analysts and other industry experts believe the market could be in for a decline. But cocoa is something people will continuing crave and new markets, such as those in Asia, are growing stronger. Whether the positive factors can offset the risks in the industry is the question. Chocolate fans around the world are waiting for the answer.