A huge cocoa shortage has hit the world's top cocoa-growing countries. Now, for the third year in a row, there are not enough cocoa beans to meet global demand. In 2024, cocoa prices soared to all-time highs. But what caused the shortage? And what does this mean for chocolate companies and chocolate lovers?
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00:00This factory is behind the biggest chocolate manufacturer in the world.
00:07We make enough chocolate in four days to equal the weight of the Statue of Liberty.
00:12Here they pump out 45,000 tons of Snickers and peanut M&Ms every year.
00:19But this year the cocoa beans needed to make chocolate have gotten a lot more expensive.
00:25The price of cocoa on the global market did skyrocket to historical highs.
00:31A dire bean shortage in 2024 pushed the price to an all-time high of over $12,000 a metric ton.
00:39It never has happened before.
00:42Nobody was able to predict that we would ever get to this level.
00:48Consumers are already seeing candy bars hit shelves with a little less chocolate.
00:53So what's causing the surge in cocoa prices?
00:56And what does this mean for chocolate lovers?
01:06Joseph Sasu starts harvesting his 17 acres of cocoa in the central region of Ghana in October.
01:13Inside this healthy pod are the pearly white cocoa beans that will become chocolate.
01:19But in the last few years, Joseph has been finding more sick pods like this,
01:24completely black or covered in white fuzz.
01:29They've been infected with an incurable virus called swollen shoot.
01:39Tiny mealy bugs spread the virus as they feed on the sap of the cocoa trees.
01:43Once it takes hold, the leaves can become discolored or die back.
01:48Stems might swell, and smaller pods may form.
01:52After a few years, swollen shoot can kill the plant.
02:04Ghana and Ivory Coast grow more than half of the world's cocoa crop.
02:08But for the third straight season, there hasn't been enough cocoa to meet global demand.
02:13This year, farmers are projected to harvest over 700,000 metric tons less than the previous season.
02:19Now, nearly a third of cocoa farmland in Ghana is infected.
02:35The only way to stop the spread is by cutting down the infected trees and planting new ones,
02:41which can take four years to grow fruit.
02:45Imagine from a smallholder's perspective, you're faced with a choice of removing, eliminating your potential to earn an income,
02:53or keeping that tree going for as long as you can.
02:57That's Christy Liesel, a 20-year veteran chocolate scholar.
03:01The longer you keep a tree around with swollen shoot virus, the more chance it has to spread to surrounding trees.
03:08Joseph has already removed about 1,500 infected trees within the last five years.
03:27Another problem is that Ghana's land is also rich in gold.
03:31And more and more, illegal mining operations called the Lamsi have been taking up land that used to grow cocoa trees.
03:38These miners have been known to intimidate farmers into selling their land.
03:51Sometimes they'll take over farms without asking at all.
03:55That's what happened to Janet.
03:57Armed guards kept her out while miners cut down nearly all of her 6,000 trees to dig gold.
04:03They left her land barren and poisoned.
04:06Over and over and over again, I have had cocoa farmers really on the verge of tears,
04:12explaining to me that they are no longer able to sell cocoa, even if they've retained their own land.
04:18The Lamsi has been growing since the early 2000s.
04:21But it's not just the cocoa farmers.
04:23It's the farmers themselves.
04:25It's the farmers themselves.
04:27It's the cocoa farmers themselves.
04:29It's the cocoa farmers themselves.
04:32The Lamsi has been growing since the 2000s.
04:35Many illegal mines are operated by Chinese companies
04:39that have brought in equipment to speed up production and convert farms faster.
04:43And more cocoa farms are selling their land in part due to an economic crisis
04:48that sent inflation skyrocketing to 54% in 2022.
04:52We know that cocoa farmers are very often constrained for cash.
04:57Joseph has refused to sell to Glamsi, even though his trees have been struggling.
05:01Parts of Ghana are facing their worst drought in 40 years.
05:05Other parts of the country have dealt with heavy rainfall that's spoiled beans.
05:09Last year, Joseph made less than $1,800 from his farm.
05:13But he's still struggling to make ends meet.
05:16The Lamsi has been growing since the early 2000s.
05:19It's the farmers themselves.
05:21It's the cocoa farmers themselves.
05:23Last year, Joseph made less than $1,800 from his farm.
05:27And while cocoa prices are spiking globally because of the shortage,
05:32farmers aren't necessarily benefiting from that.
05:35That's because they have to sell every single bean they grow
05:39to the country's cocoa board, known as the Cocoa Bod.
05:43The organization was created in 1947 to protect farmers from volatile global prices.
05:48At the beginning of each season, Cocoa Bod sets the price it will pay farmers for their beans.
05:53When the price goes down globally, farmers still get the set amount from Cocoa Bod.
05:58But if the price goes up, they won't benefit from that.
06:01Cocoa Bod is the only organization allowed to market and export Ghana's beans.
06:05Its biggest clients are the world's largest chocolate companies,
06:08mostly in Europe and North America.
06:11Cocoa Bod negotiates contracts with these companies to deliver beans months in the future.
06:16That's called the futures market.
06:18Because of the shortages, cocoa beans reached a record $12,000 per metric ton
06:23in April 2024 on the futures market,
06:26more than five times what farmers were making then.
06:29So some farmers started turning to the black market,
06:32selling their crops to smugglers who could pay them more.
06:35In an attempt to stop that, Cocoa Bod in September
06:38increased what it pays farmers to about $3,000 per metric ton.
06:42Cocoa's future price has dropped since April,
06:45but it's still about double what it was a year ago.
06:52It's a price cocoa processors in Ghana are struggling to pay.
06:57Most of West Africa's beans don't stay on the continent.
07:00They're exported to the U.S. and Europe,
07:02where large multinational corporations turn the beans into valuable chocolate bars.
07:08If you look at the value chain of cocoa, money is made in the finished product.
07:13Lloyd oversees Niche, which roasts and grinds beans.
07:18It's one of only about a dozen companies set up to process cocoa in Ghana
07:23because it's so expensive to do it.
07:26Lloyd's been pushing to keep more chocolate production inside his country.
07:37This year, that goal got harder.
07:40Niche and most Ghanaian factories had to stall production at some point in 2023
07:45because they couldn't afford beans.
07:48Despite being much closer to farms,
07:50Ghanaian processors have to pay the same price as foreign companies
07:54when buying beans from Cocoa Bod.
07:57For now, almost all of Lloyd's business is making semi-finished products
08:01like cocoa butter and cocoa mass.
08:04But he wants to make more finished chocolate bars.
08:11I want my chocolate to be consumed in Africa.
08:16The cocoa crop took hold in Ghana in the 1870s.
08:20Around the same time, the British declared the southern region a colony
08:24and began invading north.
08:26In the century that followed, cocoa production exploded.
08:30Locals owned and ran all the small farms,
08:33but the raw product was almost exclusively exported to Europe.
08:37A lot of what we know today as contemporary chocolate
08:41really grew out of this trading relationship between Ghana and Britain,
08:44including the flavor of chocolate itself.
08:47Although Ghana gained its independence in 1957,
08:51it still exports most of its beans abroad,
08:54with half ending up in Europe.
08:57This has left West Africa with just 5% of the $200 billion chocolate industry,
09:04despite it growing about three-fourths of the world's cocoa.
09:08And the global surge in price this year
09:11has made it even harder for Ghana to change that.
09:15This really is a setback with the whole agenda.
09:18Last few years, the outputs even from these artisanal chocolate makers
09:22have also had a nosedive.
09:24Michael runs Ferafrique, a chocolate maker in Aminasi, Ghana.
09:28While he had to dish out a lot more cash for beans,
09:31he didn't have to shut down or pause production.
09:34We had to make tough decisions as a company to still stay afloat.
09:39When we filmed with him two years ago,
09:41Ferafrique was focused on making finished chocolate bars,
09:44pumped into molds in temperature-controlled rooms.
09:47But to stay afloat, Michael has pivoted to making chocolate drops,
09:51which he sells mostly in Europe to the baking and ice cream industries.
09:55We are doing up to 60% of the container space for just drops.
10:00As we stand right now,
10:01we are completely sold out for chocolate drops for next year.
10:05Michael is also focusing on countries like South Africa,
10:08which has less competition from big chocolate makers.
10:20So how is all of this affecting prices and production in the U.S.?
10:24One of New York City's oldest chocolate houses had to cut costs too.
10:28Well, we use a high percentage of cocoa in our product, right?
10:31And so I think that's why we're probably getting hit harder.
10:34Anthony Cerrone co-owns the century-old company Lilac Chocolates.
10:39He buys these 10-pound blocks from Cargill in Minnesota,
10:42one of the world's largest chocolate processors.
10:46We melt it down, we temper it,
10:48and we use it as an ingredient in our recipes.
10:50We renewed our chocolate contract this year.
10:53Our prices were up 62% versus last year.
10:57As you can imagine, that was a big hit.
10:59Anthony had to raise prices on a few items in March,
11:02but most of his sweets haven't seen an increase.
11:05We made the decision to, you know,
11:07accept lower margins through the season.
11:09That means through Christmas.
11:10Some of our items, we haven't taken a price increase for two years.
11:14And despite the chocolate prices, we decided not to.
11:17Luckily, the company saw a 9% increase in sales this year, which has helped.
11:22And Anthony hopes he'll see another bump this fall and holiday season.
11:26We're in Halloween season now, but the day after Halloween,
11:29Thanksgiving items are gonna show up,
11:31so we're making items like our turkeys.
11:33This one's 13 1â2 pounds.
11:37That's 8 pounds.
11:38Yeah, that's 8 pounds.
11:40Almost 9.
11:42To make these huge sculptures,
11:44workers pan colorful details with dyed white chocolate.
11:47So they'll do one color, put it in the cooler,
11:49bring it out, do the second color, and so on and so forth.
11:53They fill them up from this fountain for the shell.
11:55Lilac has about 1,000 specialty molds in its collection.
11:59The Empire State Building.
12:00A chocolate pizza slice.
12:02These are very popular.
12:03We have a car collection.
12:05Here we have whales.
12:06We make these delicious chocolate high heels that come painted.
12:10Then we also make these chocolate handbags.
12:13But more than half of the company's store sales come from treats in the cases.
12:18Nonpareils.
12:20Truffles.
12:21Chocolate-covered pretzels.
12:24Workers pipe, unmold, and package each one by hand.
12:31Everything that we do here is old school.
12:33There's a lot of labor involved.
12:35The Brooklyn factory makes 175,000 pounds of chocolate a year
12:39and has followed the same recipe since the 1920s.
12:42Almond Bark is probably our number one best-selling product of everything that we make.
12:47It's got two ingredients, chocolate and almonds.
12:51Still, Anthony isn't sure he'll be able to hold pricing on these handmade products
12:55if cocoa gets more expensive.
12:57If chocolate prices continue to go up next year, I mean, that's going to affect our business
13:02and at some point we'll probably have to take price increases,
13:04but we're trying to hold off as long as we can.
13:10Multinational chocolate companies are also pivoting.
13:14The big companies have more options for managing that price increase.
13:20Use less cocoa in their products.
13:22Put other stuff into your products.
13:25Nuts, marshmallows.
13:28In 2020, Mondelez dropped the size of many of its Cadbury chocolate bar multipacks.
13:34In 2019, Hershey's cut down its 18-ounce Kisses pack by almost two ounces.
13:39Hershey's also launched a new chocolate-frosted donut KitKat
13:43that's just dipped in chocolate, not completely coated,
13:46and a Reese's Cup filled with caramel as well as peanut butter.
13:49In 2023, Nestle shrunk its fun-sized KitKat bars by 17% in Australia.
13:56Mars Wrigley slimmed down its Galaxy chocolate bar in the UK by 10 grams.
14:03We visited Mars Wrigley's chocolate factory in Topeka, Kansas,
14:07which makes Snickers, Milky Ways, and Peanut M&Ms.
14:12It's a pressure, but it goes through cycles like every other commodity.
14:16Tim LaBelle, Mars Wrigley's chief Halloween officer â yes, that's his real title â
14:21maintains that the company hasn't touched its recipes in the U.S.
14:25Before we pass on a price increase to a consumer,
14:28we look at every possible angle to take costs out of the system in a responsible way.
14:33The company said it can turn to cutting manufacturing and material costs when cocoa prices go up.
14:38Mars Wrigley says it has increased its suggested pricing for retailers.
14:42Like any company, there's been pricing over the last couple of years
14:45done in a way where we believe it's a responsible way to do it.
14:50When we visited the factory, it was producing enough candy each day to stretch about 120 miles.
14:56This year, we are going to make the most Halloween candy that we've ever made in Topeka.
15:01Mars's Topeka factory gets the majority of its cocoa from West Africa
15:05and makes 1.5 million pounds of chocolate in-house every week.
15:09Its Milky Ways are nougat and caramel enrobed in chocolate.
15:13Our Three Musketeers Milky Way line, it's actually our largest and longest fill bar line in the world for Mars Wrigley.
15:21Mars Snickers are milk chocolate filled with caramel and peanuts.
15:25And while regular M&Ms are mostly milk chocolate,
15:28the peanut ones are mostly, well, nuts.
15:31Every day, we roast enough peanuts that are equal to the weight of a fire truck.
15:37The peanuts get coated in chocolate and then covered in a colorful candy shell made of sugar.
15:43Yeah, a lot of people believe that the color of the M&M makes the flavor change,
15:47but really, it doesn't. They're the exact same flavor in all the colors.
15:52While workers aren't allowed to taste test straight off the line,
15:55While workers aren't allowed to taste test straight off the line,
15:58they can do visual checks every hour.
16:01They're making sure that the product is the right size, the right shape,
16:04the right decorations, has M's on them, that the colors are right.
16:08And if something looks wrong, all of our associates have the authority to shut the line down.
16:13A meter makes sure each bag is getting the right amount of each color.
16:17My wife is never sick of me bringing home chocolate or coming home smelling like chocolate.
16:23But Mars Wrigley is seeing a trend that could bring some hope.
16:26We have some of our fastest growing items in the fruity section.
16:30In its annual report, the company found that while chocolate was still its favorite,
16:34gummies, fruit, and sour candies were more popular among younger generations.
16:39We're very fortunate where we have three platforms for our fruity business.
16:43We have Lifesavers, Starbursts, and Skittles.
16:46Sours is a big thing right now, so we're looking to introduce sour-based products in the gummy area.
16:52Mars Wrigley also found that younger customers like variety.
16:56So the company launched these packs for Halloween, which include both chocolate and gummies.
17:01So I think we're well positioned to take on any headwinds or tailwinds that come our way.
17:07But what does all this mean for customers?
17:09Well, besides maybe a little less cocoa in your chocolate bar, you might also have to shell out some extra cash.
17:15Hershey's and Cadbury have also raised prices,
17:18meaning your money might not go as far to fill up your Halloween bucket this year.
17:22The best thing you can do is to prepare your expectations for some kind of change.
17:28That may be fewer bars on shelves.
17:31It may mean that your best-loved chocolate candy looks a little bit different.
17:36I think we have been living with chocolate as an everyday luxury for generations now.
17:42So I think that it is probably wise for people to start thinking of chocolate as something a little bit more precious than we have done in the past.