Latest / The SME Stream / Paul Joules: RaboResearch analyst on the rise in chocolate companies looking to develop alternatives

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Paul Joules: RaboResearch analyst on the rise in chocolate companies looking to develop alternatives · The SME Stream

• 0:00
  Speaker 1: First chocolate get ready for synthetic stuff potentially. A new
• 0:05
  Speaker 1: report into the state of the global chocolate industry is
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  Speaker 1: found that confectionery giants, all your big ones, scrambling for
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  Speaker 1: alternatives to cocoa beans. The main ingredient in our chocolate
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  Speaker 1: is becoming raarer and rarer to come by, shooting prices
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  Speaker 1: up to above double what they were in twenty twenty three.
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  Speaker 1: You'll know this story from last year. But now businesses
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  Speaker 1: like Cabri Hershey's, they're looking into lab grown coco is
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  Speaker 1: an alternative, whole bunch of stuff. Paul Jewels is Rubbobanks
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  Speaker 1: research channels with us. Paul, good afternoon.
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  Speaker 2: Hi, how you doing very well?
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  Speaker 1: Thank you? So what's making it so hard to get
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  Speaker 1: our hands on cocoa beans?
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  Speaker 2: So the reason we've got these very very high chocolate
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  Speaker 2: prices is all to do with that main ingredient, coco.
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  Speaker 2: What we've seen over the past couple of years is
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  Speaker 2: cocoa prices they reached all time highs. So, just to
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  Speaker 2: give you a bit of an idea, coco prices typically
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  Speaker 2: trading around about two three thousand US dollars a ton,
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  Speaker 2: they went all the way up to eleven thousand US
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  Speaker 2: dollars are done. We had a lot of production issues
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  Speaker 2: take place and as a result, that led to less
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  Speaker 2: coco in the world and higher prices.
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  Speaker 1: And what's what we're as why the shortage.
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  Speaker 2: So the shortage really occurred because where you have most
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  Speaker 2: of the production, West Africa. You have two countries and
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  Speaker 2: they produce about sixty percent of the world's cocco. So
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  Speaker 2: that's Garner an Ivory coast. What we saw take place
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  Speaker 2: over the past few seasons was very bad weather. We
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  Speaker 2: saw a number of different issues as well. We also
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  Speaker 2: saw a lot of tree disease that led to a big,
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  Speaker 2: big drop in yields and overall production and production was
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  Speaker 2: historically really really low.
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  Speaker 1: Okay, Well, is that an issue that will recover or
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  Speaker 1: clearly that clearly these big companies don't think it is,
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  Speaker 1: otherwise they wouldn't be piling all this money into alternatives.
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  Speaker 1: Is that true?
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  Speaker 2: So to some extent, yes, but at the same time
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  Speaker 2: we are actually seeing a bit of a recovery already.
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  Speaker 2: It's that classic case of high prices curing prices. So
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  Speaker 2: producers have been given the signal to really try and
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  Speaker 2: ramp up production of cocoa. Because they've got these very
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  Speaker 2: very good prices, they can make quite a lot more
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  Speaker 2: money than they typically would because of that extra production.
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  Speaker 2: We're now starting to see online we are seeing a
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  Speaker 2: bit of a decrease in price, so we've seen prices
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  Speaker 2: probably about half from their peak, but they're still historically
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  Speaker 2: really really high.
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  Speaker 1: Okay, can you tell the difference that they're going into
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  Speaker 1: lab grown cocoa beans or lab grown chocolate is can
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  Speaker 1: you tell the difference when you taste it?
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  Speaker 2: Yeah, So again it's a bit of a mix to
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  Speaker 2: you on this one. So if you look at the
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  Speaker 2: lab grown stuff, probably with that that they're really trying
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  Speaker 2: to make it more or less identical because you're actually
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  Speaker 2: replicating the cocoa bean itself. The issue of the lab
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  Speaker 2: grown coco though, is that's actually nowhere near commercialization. It's
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  Speaker 2: a really really expensive process, so there's probably very few
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  Speaker 2: people in the world who've actually tasted lab grown coco that.
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  Speaker 2: The more interesting one is actually fermentation, So that's transforming
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  Speaker 2: plants based inputs such as oats, seeds, faber beans, barley,
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  Speaker 2: grape seeds, for example, and mixing those together to get
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  Speaker 2: a chocolate like taste or chocolate like ingredients With that one,
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  Speaker 2: they've said that the taste can be a little bit different,
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  Speaker 2: it can be a bit more sour if they don't
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  Speaker 2: quite get the fermentation right. And it's not necessarily a
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  Speaker 2: direct replacement for a typical chocolate bar. It would more
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  Speaker 2: be used in fillings and other chocolate like.
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  Speaker 1: Ingredients because also it wouldn't be brown, would it.
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  Speaker 2: Yeah, exactly. It would certainly probably have a bit of
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  Speaker 2: a different profile, a bit of a different appearance and taste,
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  Speaker 2: So yeah, I wouldn't expect it to be a like
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  Speaker 2: so like substitution for sure.
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  Speaker 1: Does this a fit coffee as well?
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  Speaker 2: We're not really seeing it to the same extent with coffee,
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  Speaker 2: and to be honest, even with coco, and you know,
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  Speaker 2: we can talk about coffee as well here. If we
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  Speaker 2: are seeing this to any degree, very very small in
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  Speaker 2: terms of the total market share. The focus is still
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  Speaker 2: very much on the typical tree crops. These are very
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  Speaker 2: much infancy projects in developments that we're seeing very very
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  Speaker 2: small part of the market.
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  Speaker 1: Paul, appreciate your time this evening. Thank you. Paul Drowls
• 4:10
  Speaker 1: Rabobank research analysts with us. So basically the moral of
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  Speaker 1: the story is go before you eat your chocolate, go
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  Speaker 1: and check the ingredients and on the back. If it
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  Speaker 1: says something to the effect of chocolate like ingredient, it's
• 4:23
  Speaker 1: not chocolate. It's just not chocolate. For more from Hither
• 4:27
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• 4:30
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