Will 2015 bring a third successive year of gain? Compared with the booming trend of the past two years, supported by a strong chocolate demand around the world, the market is facing challenges. Cocoa prices rose more than 35% in the two years since the start of 2013. A consumers in emerging markets developed a taste for chocolate, while economic recovery in EU and the US led to a resurgence in demand. Since the new year higher chocolate prices have hit consumption.
The figure for Europe, the largest consumer for chocolate, fell over 7 per cent. North America cocoa grindings declined 2 per cent. According to Nielsen data, global consumption in volume terms fell 1.8 per cent in the three months to November 2014. Higher prices usually led to food producers looking for cheaper substitutes, but this has been relatively limited among chocolate producers. This mainly due to food labeling regulations in Europe and US as well as negative response from consumers.
The fall in demand as a result of the chocolate prices puts paid to a forecast that was doing the rounds in the chocolate industry last year. That if production of cocoa remained static and demand continues to grow, the market would see a supply, deficit of 1m tonnes by 2020. Widespread concerns about the 1m tonnes deficit eventually prompted the International Cocoa Organization to put out a statement in November where the fears were ‘ overstated in the extreme’.