The increase in commodity prices and the growing pressure on sustainability are pushing chocolate and confectionery companies to invest in finding other ingredients for sweet treats.
Mondelez International, the maker of Oreo, was among the investors that took part in a 4.5mn funding round for cell-based seed company Celleste Bio earlier this month, while British food ingredients company Tate & Lyle also announced it had partnered. BioHarvest Sciences to develop sweeteners from synthetic plant-derived molecules.
The moves came as cocoa futures traded in New York rose above $10,000 per tonne, continuing A dizzying rally which started last year. At their peak in April, prices of the key ingredient in chocolate exceeded $12,000 per ton, a three-fold increase from January.
West African farmers, who produce more than two-thirds of the world's therethey have faced various diseases and bad weather, driven by climate change, which has reduced production and caused bean shortages worldwide.
“If we don't change the way we get cocoa, we won't have chocolate in two decades,” said Michal Beressi Golomb, CEO of Celeste Bio. With cell-cultured cocoa, the industry “will not have to depend on nature”, he added.
Global shortages and record prices drive interest from chocolate and confectionery companies and investment, according to Golomb. “They're really concerned about having sustainable, consistent quality cocoa,” he said. “Everybody wants to be part of the party.”
The Israeli company, founded in 2022, is one of the growing group to begin with uses cell culture technology to bypass the need for traditional farming methods that are vulnerable to climate change and market volatility.
This change can provide a solution to management challenges, such as New EU law on deforestationwhich requires proof that goods such as cocoa are not grown on reclaimed land, adding more pressure to supply chains and prices.
Other groups are looking at how to make desserts with other, more readily available raw ingredients. Last year the Finnish confectioner Fazer released a limited edition cocoa-free “chocolate” made from local malted rye and coconut oil. From 2022, the Helsinki-based company is also working with VTT, Finland's government research institute, to grow cell-based cocoa pods.
“Almost four years ago, research told us that climate change would impact the availability and price of cocoa,” said Annika Porr from Fazer Confectionery's Forward Lab. “This year it became a reality.”
Elsewhere, Cargill, the world's largest agricultural product trader, last year partnered with Voyage food startup, which produces sustainable foods such as chocolate and nut spreads without their traditional ingredients of cocoa, nuts and hazelnuts. It does so by using grape seed, sunflower protein powder, sugar, fat, and natural flavors.
“Cocoa prices were not in the news when we started. Most people in either the US or the UK could not pinpoint where cocoa was grown. And now, with rising prices, it's very easy to see why this is necessary, said Adam Maxwell, CEO of Voyage Foods.
Consumers were looking for “sustainable and sustainable products, which taste great and are produced without nut or dairy ingredients used in the recipe”, added Cargill.
While the price of sugar – the product of which is not covered by EU rules – remains stable, the industry is facing increasing pressure to deal with the environment and meet consumer demand for healthier options.
Tate and Lyle, who used to be a sugar producer and now experiment be a sugar reduceris working with startup BioHarvest Sciences to develop artificial sweeteners derived from plant cells.
BioHarvest Sciences has invested $100mn over the past 17 years to develop the technology, which extracts plant compounds that drive sweetness while suppressing bitter tastes.
The partnership could help Tate and Lyle move away from highly processed foods, which has drawn scrutiny from investors and scientists.
“Our customers and their customers want something that's cheap and naturally available,” said Abigail Storms, senior vice president at Tate & Lyle, which sells to packaged food companies such as McVitie's biscuit maker Pladis.
While market fluctuations may drive investment in other methods, growing ingredients in a laboratory rather than on a tree or in the field is not cheap.
Celleste Bio aims to reach cost parity with pre-2024 cocoa prices – about $7,000 a ton for cocoa butter and $3,000 for cocoa powder – by 2027 once they are on the market and have ramped up production, he said. Golomb.
Tate and Lyle want to make sure products made using their desserts don't cost more than “total calories or other total sugars”, Storms said. “It's all about democratizing those resources.”
Breaking out of traditional product markets is also a battle against red tape and changing consumer expectations. Fazer Group's cocoa-free bar, for example, can't be called “chocolate,” instead it's labeled “candy tablet” because of EU rules that protect the name of products containing cocoa.
Cell-based cocoa faces a similarly difficult regulatory maze, according to Porr, with “fresh food” approval likely to be a steep climb in the EU compared to the US.
Winning over customers can be equally challenging. The Fazer Group's initial research suggested that transparency about how cell-based cocoa is made could help change public perception, Porr said, but taste and texture were the final test. “Consumers really expect it to taste and feel like traditional cocoa,” he said. “There is still work to be done.”