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KaiNovember 5, 2024

Nobody panic, but we’re in the midst of a global chocolate crisis

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Price hikes, disappearing products and sourcing struggles – could this be the new normal for the chocolate industry?

Last week, Whittaker’s announced its chocolate was changing. Its cacao will no longer be sourced exclusively from Ghana, with the global cocoa shortage forcing the company to get the key ingredient from “several” other African countries. Whittaker’s promised consumers wouldn’t notice any change in taste, but on the back of a series of disconcerting choc-related headlines this year, it’s a bit of a worry.

On top of this, another unsettling incident: at a North Shore Pak’nSave last week, a shopper was looking for chocolate chip brioche buns, a lunchbox staple for her fussy teens, but they were nowhere to be seen. When she asked a staff member, she was told they were no longer being baked, because chocolate prices had risen too high. When The Spinoff asked for more info, a Foodstuffs spokesperson said that individual stores made their own decisions, but there hadn’t been any “widespread impacts on bakery items that contain chocolate or cocoa”.  A quick search on the Pak’nSave website, however, shows chocolate chip brioche buns appear to be out of stock pretty much everywhere. 

Are these signs of a coming chocmageddon, or is this just the new normal? Here’s what you need to know. 

Why have cocoa prices skyrocketed?

For decades, humans around the world have been enjoying the rich velvety treat that is chocolate, picking up bars (or buns) of the good stuff for a couple of bucks. This is because the cost and supply of cocoa had remained relatively stable, so chocolate has been an accessible luxury. But now, a shift is occurring. The cocoa trees in West Africa, especially Ivory Coast and Ghana, which are estimated to provide 50-70% of the global cocoa supply, are having a hard time. They’re producing less because they’re ageing, and because they’ve been hit with black pod disease and irregular rainfall. Because their production has plummeted, there’s a global shortage of cocoa beans, which is driving prices up.

As well as these tangible pressures on the cocoa supply, market dynamics have been influenced by speculative investors. Prominent figures including hedge-fund managers known for oil trading have entered the cocoa market looking for profit. The influx of speculative investment has contributed to a dramatic increase in cocoa prices.

The price of cocoa reached an all-time high in April – they “shattered the calm of their previous trading range”, said research analyst Paul Joules. According to his report, which was released by agribusiness banking specialist Rabobank in September, prices hit the highest levels in nearly 50 years, nearly USD$12,000 per metric ton, in the first half of 2024. The report declared a “cocoa crisis”.

graph showing Prices of cocoa have spiked up in 2024.
Prices of cocoa have spiked in 2024 (Image: Rabobank).

There’s a lag between the price of cocoa at the manufacturing level and the price we pay for our chocolate at the till, so while we’ve already seen some price increases and changes (RIP buns), it’s expected that more are on the way. Stats NZ data shows the price of a 250g block of chocolate this September was 20% higher than September last year.

Graph showing prices of 250 bars of chocolate rising
In August 2021 the price of a 250g block of chocolate was $4.18. This August it was $5.56. (Chart: Stats NZ).

Perhaps the price is right

New Zealand chocolate expert Luke Owen Smith looks at the so-called crisis from another angle. “The price of beans has always been too low,” he says. “That’s made it very difficult for cocoa farmers to make a decent living.” Issues with modern slavery and illegal child labour in the chocolate supply chain have been widely reported, particularly in the Ivory Coast and Ghana. Owen Smith doesn’t think the price of cocoa beans needs to go back down, instead saying “we need everyone to realise that cheap chocolate is made possible by a deeply unfair and unsustainable system”.

Owen Smith is an involved advocate in the world of bean-to-bar and craft chocolate. He says that craft chocolate makers have had a headstart in navigating the changed price of cocoa, as “New Zealand’s best makers pay well above the commodity (or even Fairtrade) price for their beans.” This is because they value quality over quantity (and hopefully the people producing their ingredients), because they’re creating chocolate designed to be savoured like fine wine.

craft chocolate
Chocolate may become a boutique luxury rather than an easily affordable one. (Photo: Canva).

In previous pieces of writing, Owen Smith has argued that price increases on chocolate bring it more in line with equivalent affordable luxuries, like wine or olive oil. It may be outside some budgets, but it reflects the product and the labour that goes into making it. “It’s time to rethink the system and accept that chocolate should cost a lot more than what we’re used to,” he says.

In September analyst Paul Joules said, “it does look like we’re in a higher-for-longer price environment”. It’s likely that prices won’t be the only thing to change. Chocolate manufacturers are likely to adopt strategies like shrinkflation – reducing package sizes while maintaining prices, and skimpflation – altering recipes to use less cocoa and more fillers. Or, if Owen Smith gets his way, chocolate consumers will instead treat chocolate like the luxury it is, buying ethical chocolate as a special treat, instead of wolfing down cheap nasty stuff.

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Gabi Lardies
— Staff writer
Keep going!
A cozy outdoor café in a European street with cobblestones and warm lights. Empty chairs and tables with colorful cushions line the walkway. People are dining under large umbrellas against a backdrop of charming, rustic buildings.
The European al fresco dream people obnoxiously talk about after returning from holiday (Photo: Getty Images)

KaiNovember 1, 2024

Why do we make it so hard to dine outside?

A cozy outdoor café in a European street with cobblestones and warm lights. Empty chairs and tables with colorful cushions line the walkway. People are dining under large umbrellas against a backdrop of charming, rustic buildings.
The European al fresco dream people obnoxiously talk about after returning from holiday (Photo: Getty Images)

We live in a country with a very nice outdoors – but fee increases and bureaucratic restrictions are making it hard for hospo to offer us the al fresco experience so many of us enjoy.

This is an excerpt from our food newsletter, The Boil Up.

In November 2021, one question broke through the wall of questions about what Aucklanders were and weren’t allowed to do during step 2 of Alert Level 3.

“Has cabinet given any consideration to al fresco dining?” Wellington-based gallery journalist Barry Soper asked the prime minister at the 1pm press conference on November 8, 2021.

Hospitality businesses in areas under some messy form of Alert Level 3 were still operating under the “click-and-collect” model, and Soper was simply asking questions about whether we could instead sit outside to enjoy a little pizza on behalf of the people and business everywhere (Aucklanders and Auckland).

As Madeleine Chapman reported, Soper persisted with this line of questioning for quite some time. It came to a head two weeks later, and Soper moved on from worrying about eating outside and onto whether the power of the podium had gone to the PM’s head. In solidarity, The Spinoff launched a ticker onsite, counting down the days until Soper could dine alfresco again (in Auckland). It was incredible cut through at a time when we were also faced with perplexing issues like whether we could pee in each other’s houses after beersies in the backyard.

“Barry Soper”, Chapman wrote, “loves al fresco dining. To sit outside with the breeze in your hair and the sun on your skin, dining. It’s the peak of human experience, what us mere mortals were put on this cursed earth to strive for.”

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Anna Rawhiti-Connell
— Senior writer

Nearly three years on, as a fan of a little al fresco dining myself, I am here to pick up the torch so passionately lit by Soper and ask why we seem hellbent on making it so damn hard, and so damn expensive for restaurants, bars and cafes to facilitate the peak human experience of eating and drinking outside?

Aotearoa has a lot of really nice outside. Many scenic views and plenty of waterfronts. We also have lots of lovely food, a plethora of wonderful hospitality businesses and tanks full of delicious cold beverages best enjoyed with the breeze in your hair and the sun on your skin.

In the last few weeks, multiple reports have bubbled up about the charges hospitality businesses face for having outdoor dining spaces.

Al fresco dining fees have “riled Tauranga and Mount Maunganui cafe and restaurant owners”. As is the case across most territorial authorities in New Zealand, hospitality businesses are charged based on square metreage and then pay administration fees on top of that.

RNZ reported that Queenstown restaurant and cafe owners are angry about rises of up to 300%. The council says businesses had fair warning of the increases. Restaurant owners make the fair point that due to Queentown’s proximity to Antarctica (I assume), dining outside isn’t a year-round option they can offer, and yet they are pinged for the full year. In a report from the Otago Daily Times, one lakefront hospitality operator says they’re facing a $51,000 annual fee for outdoor dining, while a pop-up food vendor, right outside their area, was operating “without paying”.

A lively outdoor cafe scene in Queenstown with people dining under colourful umbrellas on a sunny day. The street is lined with shops and restaurants, and a clear blue sky can be seen overhead.
Living the al fresco dream in Queenstown (Photo: Getty Images)

That leads us to Christchurch, where those wanting a heap of food truck vendors and restaurants are at war. In short, the Christchurch Arts Centre has made an application for consent to allow 33 food trucks to operate on its site seven days a week, and the Christchurch Central Business Association, representing those with permanent bricks and mortar restaurants, have objected to it. The Press’s Sinead Gill describes the stoush as an “unsolvable question”.

Headed further north again, Eric Crampton responded to the food truck fight in Christchurch, writing a column saying he wished it was a problem Wellington had, bemoaning the lack of food trucks along Wellington’s waterfront. As an economist, Crampton points to issues around planning, consent and what he describes as “a punitive ratings differential on business use of land.”

In Auckland, where the city is heroically trying to encourage more outdoor dining other bureaucratically imposed restrictions make it difficult for many to implement.

In a piece published by Greater Auckland, urbanist Ben van Bruggen wonders whether outdoor dining could revitalise Queen Street. High streets all over the world are struggling, and as van Bruggen writes, Auckland Council “is actively encouraging outdoor dining in the city centre, including on Queen Street, by offering fee-free trials to food and beverage (F&B) operators and seeking feedback on how to improve the situation.”

I think Aucklanders are particularly hard on Queen St and complaining about it has become something of a sport. It does sometimes feel like a shadowy wind tunnel, but the lack of outdoor dining has also always puzzled me. The lack of outdoor dining everywhere puzzles me to be honest, and it puzzles many other particularly obnoxious people who’ve chucked back Aperol Spritzes sitting outside anywhere in Europe, including huddled on the corner of a street with 50 other people outside a London pub.

As van Bruggen notes, there are a range of other practicalities to overcome before outdoor dining on Queen St is a more feasible option for hospitality business, but he says they’re not insurmountable. “The potential is certainly there – as long as we can seize it,” he writes.

Someone once told me they thought the upmarket food court at now-shuttered Queen’s Rise on Queen St was always going to struggle because “Aucklanders like to be seen”. He implied that included as we ate out. The longevity of places like SPQR (until recently, RIP) and Prego on Ponsonby Road suggests that theory might hold some truth.

I was in Wellington recently and wandered down to the markets on the waterfront. I was there just as another round of “Wellington is dead/dying” discourse was kicking off, and the waterfront that day provided a counterargument. “Why is everyone so nice to each other?” one visitor from Auckland (my husband) wondered aloud as the sun shone and people ate delicious food sitting on the grass, surrounding embankments and benches. A true mystery!

Whether it’s because we want to touch grass or be seen, outdoor dining seems like something a country with a very nice outdoors should be good at.

Why, then, do we seem so intent on bogging it down in pinch points and competing agendas? The one true agenda of bringing life, prosperity, and communal experience to our towns and cities is just lying there, hoping to one day break through as successfully as Soper’s question about al fresco dining did in 2021.