Speciality-Food-Magazine-September-2024

16 @specialityfood to around $7,000 per tonne. A boom for hedge funds, which could make a fortune, but to the detriment of shoppers and retailers who will bare the brunt of cost rises. “Consumers are going to face higher prices for mass market confectionery,” Cocoa Runners said, which the chocolate specialist believes will lead to more producers introducing CBRs (cocoa butter replacements) such as palm and vegetable oils into their products in a bid to cut costs, leading potentially to fewer quality bars being available to specialist retail. Cocoa Runners has made several predictions around how the chocolate market will be impacted by soaring prices. White chocolate (especially craft varieties) they believe may become a rarity, with cocoa butter now costing three times more than it did a few years a huge problem for small makers, who are being forced to pay new In recent months, cocoa prices have soared to historic highs, driven by a global cocoa shortage, after poor harvests were caused by droughts in West Africa, which produces around 80% of the world’s cocoa output. In fact, the global cocoa supply was expected to fall by nearly 11% over the 2023/2024 season, according to the International Cocoa Organisation. “The recent surge in ingredient prices is a real challenge for food and beverage brands, especially SMEs,” Helen said. “We’ve seen the price of shortage-stricken cocoa skyrocket on our ordering platform, forcing brands to constantly reformulate or switch to alternatives. For example, costly locust bean gum and potato starch are now being replaced with more affordable cassia gum and tapioca dextrin.” According to Cocoa Runners the ‘spot price’ of commodity cocoa has almost doubled in recent months price rises up front for commodity cocoa, before they can direct those increases onto customers. Katie Cross, founder of Cake or Death, an Exeter-based bakery, said the sharp rise of chocolate’s price is having a “huge impact” on her feeling the pinch. The bakery found the price of chocolate rose by an alarming 150% since May 2023. Chocolate makes up a third of Cake or Death’s ingredient costs, with its brownies, which contain a high percentage of chocolate for quality core product. This autumn when supplies run low again, Katie said she will have to fork out an extra £9,000 per tonne, price hike of the year. While the increases in chocolate prices as well as cost pressures across the business are making it “increasingly or Death in 2019, said she will not change the recipe to compromise the quality of the product. However, the bakery is being forced to make savings in other areas. Meanwhile, the price of wholesale coffee has reached record highs. According to Gareth Redmond-King, head of international programme at the Energy and Climate Intelligence Unit (ECIU), the UK imported a billion pounds worth of coffee in 2023 – and the cost of a morning caffeine boost is set to rise because of extreme weather in countries like Vietnam and Brazil. “97% of all coffee globally is grown in countries vulnerable to climate impacts. More than half the coffee beans we imported last year came from Brazil and Vietnam,” Gareth said. “And coffee, like many UK food imports, cannot simply be grown here instead. If we don’t speed the path to net-zero emissions by mid- century, and support farmers and food producers at home and abroad to adapt to a warming world, then prices will only continue to rise, as supplies are squeezed further.” Italian coffee company Lavazza warned that coffee prices are set to continue rising until mid-2025. Vice chairman Guiseppe Lavazza said prices hit a record 15-year high because of supply chain disruption, geopolitical issues and poor harvests. In early July, the price of coffee reached more than £3,300 a tonne. The price rises have caused1kg bags of beans to soar by 15% in a year, but Guiseppe said the rises could reach 20% to 25% over the year as prices continue their upward trend. Cocoa up 150% while coffee at 15-year high Those who enjoy a chocolate biscuit with a cup of coffee could soon be in for a shock as the prices of cocoa and coffee have spiked. HOW CAN SMALL BUSINESSES COPE WITH RISING PRICES? “While our costs are going up, we don’t have the same leverage with retailers to be able to change our RRPs as those companies which dominate the world of grocery,” Scott from The Flava People explained. “Of course, every retailer is unique, and those who prioritise working with SMEs and are more sympathetic to the challenges we face do have more collaboration and However, there is also the end customer to consider. “We know consumers are also facing cost pressures and rising grocery costs; as a business we want to ensure we empower people to create meals which taste good and are good, which means we must remain at a price which delivers a high-quality product at a value-for-money price. Simply put, SMEs trying to balance the bottom line are undeniably facing a complex situation,” he said. The change doesn’t mean the collaborative spirit of running a small business is gone. “In order to try and increase our buying power, we have connected with fellow local business owners to create a collective volume on those ingredients which are used across the board,” Scott said. “We are trying to foster personal relationships, but there is no doubt that the way we manage the buying processes had to change simply to stay in business.”