Latest / Best of Business / 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 · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk zed B.
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  Speaker 2: First Chocolate, Get Ready for synthetic stuff Potentially. A new
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  Speaker 2: report into the state of the global chocolate industry is
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  Speaker 2: found that confectionery giants, all your big ones, scrambling for
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  Speaker 2: alternatives to cocoa beans, The main ingredient in our chocolate
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  Speaker 2: is becoming rarer and raarer to come by, shooting prices
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  Speaker 2: up to above double what they were in twenty twenty three.
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  Speaker 2: You'll know this story from last year. But now businesses
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  Speaker 2: like Cabri Hershey's, they're looking into lab grown coco is
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  Speaker 2: an alternative, whole bunch of stuff. Paul Jewels is Rubbobanks
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  Speaker 2: research channels with us. Paul, good afternoon. Hi, how you
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  Speaker 2: doing very well? Thank you? So what's making it so
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  Speaker 2: hard to get our hands on cocoa beans?
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  Speaker 3: So the reason we've got these very very high cho
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  Speaker 3: prices is all to do of that main ingredient, coco.
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  Speaker 3: What we've seen over the past couple of years is
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  Speaker 3: cocoa prices they've reached all time highs. So just to
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  Speaker 3: give you a bit of an idea, cocoa prices typically
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  Speaker 3: trading around about two three thousand US dollars a ton,
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  Speaker 3: they went all the way up to eleven thousand US
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  Speaker 3: dollars a ton. We had a lot of production issues
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  Speaker 3: take place and as a result, that led to less
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  Speaker 3: coco in the world and higher prices.
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  Speaker 2: And what's what we're as why the shortage?
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  Speaker 3: So the shortage really occurred because where you have most
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  Speaker 3: of the production, West Africa. You have two countries and
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  Speaker 3: they produce about sixty percent of the world's cocoa. So
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  Speaker 3: that's Garner and Ivory Coast. What we saw take place
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  Speaker 3: over the past few seasons was very bad weather. We
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  Speaker 3: saw a number of different issues as well. We also
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  Speaker 3: saw a lot of tree disease that led to a big,
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  Speaker 3: big drop in gields and overall production and production was
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  Speaker 3: historically really really low.
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  Speaker 2: Okay, Well, is that an issue that will recover or
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  Speaker 2: clearly that clearly these big companies don't think it is,
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  Speaker 2: otherwise they wouldn't be piling all this money into alternatives.
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  Speaker 2: Is that true.
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  Speaker 3: To some extent, Yes, But at the same time we
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  Speaker 3: are actually seeing a bit of a recovery already. It's
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  Speaker 3: that classic case of high prices, curing high prices, so
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  Speaker 3: producers have been given the signal to really try and
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  Speaker 3: ramp up production of cocoa. Because they've got these very
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  Speaker 3: very good prices, they can make quite a lot more
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  Speaker 3: money than they typically would because of that extra production,
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  Speaker 3: we're now starting to see online we are seeing a
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  Speaker 3: bit of a decrease in price, so we've seen prices
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  Speaker 3: probably about half from their peak, but they're still historically
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  Speaker 3: really really high.
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  Speaker 2: Okay, can you tell the difference that they're going into
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  Speaker 2: lab grown cocoa beans or lab grown chocolate? Can you
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  Speaker 2: tell the difference when you taste it.
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  Speaker 3: Yeah, So again it's a bit of a mix to
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  Speaker 3: you on this one. So if you look at the
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  Speaker 3: lab grown stuff, probably with that that they're really trying
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  Speaker 3: to make it more or less identical because you're actually
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  Speaker 3: replicating the cocoa bean itself. The issue of the lab
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  Speaker 3: grown coco though, is that's actually nowhere near commercialization. It's
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  Speaker 3: a really really expensive pro so there's probably very few
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  Speaker 3: people in the world who've actually tasted lab grown coco that.
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  Speaker 3: The more interesting one is actually fermentation, so that's transforming
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  Speaker 3: plants based inputs such as oats, seeds, faber beans, barley,
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  Speaker 3: grape seeds, for example, and mixing those together to get
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  Speaker 3: a chocolate like taste or chocolate like ingredients. With that one,
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  Speaker 3: they've said that the taste can be a little bit different,
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  Speaker 3: it can be a bit more sour if they don't
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  Speaker 3: quite get the fermentation right. And it's not necessarily a
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  Speaker 3: direct replacement for a typical chocolate bar. It would more
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  Speaker 3: be used in fillings and other chocolate.
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  Speaker 2: Like ingredients because also it wouldn't be brown, would it.
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  Speaker 3: Yeah, exactly. It would certainly probably have a bit of
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  Speaker 3: a different profile, a bit of a different appearance and taste,
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  Speaker 3: So yeah, I wouldn't expect it to be a like
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  Speaker 3: like substitution for sure.
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  Speaker 2: Does this a fit coffee as well?
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  Speaker 3: We're not really seeing it to the same extent with coffee,
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  Speaker 3: and to be honest, even with coco, and you know,
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  Speaker 3: we can talk coffee as well here. If we are
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  Speaker 3: seeing this to any degree, very very small in terms
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  Speaker 3: of the total market share. The focus is still very
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  Speaker 3: much on the typical tree crops. These are very much
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  Speaker 3: infancy projects and developments that we're seeing very very small
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  Speaker 3: part of the market.
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  Speaker 2: Paul, appreciate your time. The Savening. Thank you Paul Drowels,
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  Speaker 2: Rabobank research analyst with us. So basically the moral of
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  Speaker 2: the story is go before you eat your chocolate, go
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  Speaker 2: and check the ingredients in on the back. If it
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  Speaker 2: says something to the to the effect of chocolate like ingredient,
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  Speaker 2: it's not chocolate. It's just not chocolate.
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