In a few days, it will be Halloween. Children (and adults, too) will eat too much sugary candies and chocolate. In a word, there is no better time to look at the future of chocolate. Also, and more interestingly, in the context of this newsletter, the evolution we can see for chocolate is also highly revealing of the evolution of the alternative protein ecosystems towards higher-end ingredients, often with health benefits.

1- Price, social and environmental challenges

In terms of price, as you can see on the graph below, it was already highly volatile depending on the evolution of the production, but it rose quite dramatically in 2023, and it remains at high levels.

This price increase is due to a shortage, which itself can be directly linked to climate change. West Africa (where about 2/3 of cocoa beans are grown) has been plagued with severe droughts, which have severely impacted cacao. Increased adverse climate events will continue to impact prices.

Also, due to deforestation and current farming techniques, cacao is one of the highest-emitting products that we consume. It is even worse than most meat and dairy products.

Last, but definitely not least, about 1.6 to 2 million children are still working in cocoa farms, with numerous documented cases of slavery or trafficking.

2 – FoodTech answers

Investors, entrepreneurs, and large companies have not missed the current price increase. In the past year alone, we have seen the emergence of a great number of new ventures and a very noticeable increase in terms of funding.

If we use DigitalFoodLab’s usual future of food trends approach, we can identify four main groups of players. The most striking point is that we have players all alongside the curve, from short-term, already on-the-shelves solutions to very long-term ones.

DTC brands, or just “innovative branding” are an easy way to answer some of the challenges, notably by adding an extra layer of social and environmental responsibility to the products created by mainstream brands. The most obvious example is the already well-developed Tony’s Chocolonely which raised €20M last year to keep expanding its “slave-free” confectionery (if you’d like to send me a gift for this newsletter, please note that it’s my favourite snack brand).

Upcycling is a small but emerging ecosystem with numerous startups trying to solve the challenge of all the waste created by the cocoa value chain by creating products, notably beverages.

Plant-based cacao alternatives are at the top of the hype right now. There are startups from all over the world, but with a strong presence of European startups, which is quite logical, Europe’s ecosystem has always been skewed toward sustainability and social issues, and many of the biggest cocoa players are based there.

There are different levels of innovations (so take into account that this point on the curve is the average position of a much diverse ecosystem), from companies simply using carob without much innovation to more advanced approaches through fermentation (such as Planet A foods). Some products are already on the market, with light partnerships with large companies.

Finally, multiple companies are now applying cellular agriculture to cultivate cocoa cells. That’s part of the broader boom on plant cell culture that we mentioned in a previous insight. The high prices and limited quantity required, at least compared to meat, are making cocoa highly appealing as an application for cellular agriculture. Some companies, notably in Japan or Europe (Puratos, a bakery giant invested recently in California Cultured) are already betting on this space.

Let’s also keep in mind that we are not predicting that this hype is fake: the journey along the curve is not linear, and something hype can move really quickly into disruption, even if the probability is high that there will be a phase of disillusion in the middle. Indeed, if cocoa prices were to stabilise again at reasonable levels, the appetite from larger companies would certainly cool down.

All this innovation is quite exciting. It is not there to replace high-end chocolate but to become a partial or complete substitute for the chocolate used in confectionery goods and, indeed, in Halloween snacks.