Priyanka Shaw
Chennai, 4 October
Cocoa shortage has pushed chocolate manufacturers in India to increase prices and reduce product sizes.
The crisis began with the decline of imports from West African countries such as Ghana and Ivory Coast that supply almost three-fourth of India’s cocoa requirement.
“Major brands such as Munch and Dairy Milk have reduced their product weight by 10% annually,” said an analyst who tracks Nestle. “Dairy Milk chocolates which earlier cost Rs85 rose by 15%”.
This assumes significance as cocoa is a major component in producing chocolates. More than 50-90% of dark chocolate ingredients are cocoa while milk chocolate uses around 10-50% of cocoa. The impact varies across the industry. Nestle India, with 15% market share, remains less affected from immediate pressure. “Our stocks, secured before 2023, will last until the end of 2024,” a company official said, in the condition of anonymity.
Smaller players such as Lotus Chocolate Company, which has around 1% of market share, have incurred a loss of 11% in 2023 compared to the previous year 2022, in which the company earned a profit of 7%. Global cocoa prices have surged by 86% due to hyperinflation, said Vishal Punmiya, an analyst from Yes Securities. The United Nation Conference Trade and Development (UNCTAD) report said that there was a 136% increase in cocoa prices between July 2022 and February 2023.
California Cultured, a food company that uses plants to culture cocoa, is developing lab-grown cocoa, promising faster growth and less water usage. “Indian consumers will be hesitant about consuming lab-grown chocolates,” said Punmiya. “People will be ready to pay more price to get original cocoa-made chocolates”.