Cocoa in Crisis: An Opportunity to Invest in Alternatives?

Cocoa in Crisis: An Opportunity to Invest in Alternatives?

The Price of Cocoa Soars: What’s Happening?

The Numbers Behind the Historic Surge

The international cocoa market is experiencing one of the most severe supply crises in its recent history. Since 2020, the price of the bean has risen unprecedentedly, quadrupling to surpass $10,000 per metric ton in 2024. This spike has not only shaken the food industry but also captured the attention of financial analysts, commodity investors, and fund managers.

According to data gathered by commodity analysts in London, this bullish rally is not driven by speculation but by a profound imbalance between supply and demand. While global consumption of cocoa-derived products continues to rise, producing regions are facing a dramatic decline in output.

The Production Crisis in West Africa

West Africa, responsible for nearly 70% of the world’s cocoa production, has been the epicenter of the collapse. Ghana and Côte d’Ivoire, the two largest producers, have reported harvest reductions of up to 27% over the past year. The causes are manifold: crop diseases, soil depletion, unsustainable farming models, and, fundamentally, a lack of structural investment in production systems.

This mismatch has created upward pressure on prices, affecting both producers and consumers. While large companies try to maintain profit margins by using fillers and adjusting product sizes, small farmers receive only a tiny fraction of the final price—often just 6 cents per chocolate bar.

Structural Causes: Disease, Monoculture, and Climate Change

The Impact of Intensive Cultivation and Deforestation

The expansion of cocoa cultivation in Africa and Latin America has followed an intensive pattern, often at the expense of natural ecosystems. To meet international demand, nearly 90% of West Africa’s cocoa has involved the clearing of tropical forests, especially in Côte d’Ivoire and Ghana.

Farmers frequently rely on monoculture using sun-tolerant cocoa varieties. While this practice allows for higher productivity in the early years, it also requires excessive use of chemical fertilizers and pesticides, which accelerates soil degradation. Over time, these lands lose their nutrient retention capacity, reducing yields and forcing farmers to expand into new, untouched areas.

Diseases Like Swollen Shoot and Their Devastation

One of the most severe threats to cocoa crops in West Africa is the swollen shoot virus, which weakens cocoa trees and drastically reduces their productivity. This disease has been one of the main causes behind Ghana’s production drop of up to 27%, affecting not only the incomes of millions of small producers but also the stability of the global supply.

Despite its impact, the infrastructure to combat this disease is minimal, and most producers lack access to the technical and financial resources needed to prevent its spread or replace infected crops.

Climate Change as a Global Risk Factor

Beyond disease and monoculture, climate change looms as a systemic threat. Shifts in rainfall patterns, more frequent droughts, and rising temperatures are negatively affecting cocoa flowering and pollination.

Companies like Nestlé have publicly acknowledged that climate change could jeopardize future harvests, particularly in countries like Brazil, another key player in the market. Without a global strategy to address these risks, cocoa could become an increasingly volatile commodity, generating uncertainty for both producers and investors.

Ecuadorian Cocoa: An Emerging Model Amid the Collapse

Greater Efficiency, Fairer Prices, and Productive Resilience

While West Africa faces a structural crisis, Ecuador is emerging as an alternative model that has drawn the interest of agro-industrial and financial analysts. As the world’s third-largest producer with a 10% market share and 420,000 tons annually, the Andean country has managed to combine productivity, market access, and higher profitability for its farmers.

Unlike their African counterparts, Ecuadorian producers are not bound to fixed government prices; instead, they operate in a free market. This has allowed them to benefit from the price rally and currently receive up to $400 per 100 kilos of cocoa—well above what is paid in Ghana or Côte d’Ivoire.

Moreover, many farmers are part of production cooperatives, which strengthens their bargaining power and facilitates access to financing, fertilizers, and technical training. According to the NGO Rikolto, these conditions have improved the crop’s resilience to adverse climate conditions.

An Investment Opportunity in Latin America?

From a financial standpoint, the efficiency of Ecuador’s model represents a strategic opportunity for those looking to diversify investments in agricultural commodities. The country leads in productivity per hectare thanks to more adaptive and sustainable farming practices, though not without challenges.

Despite these advances, the expansion of cocoa cultivation in Ecuador has also led to deforestation, raising questions about its long-term sustainability. Nonetheless, the overall trend is positive, with stable production growth and a stronger foundation than that of West Africa.

For institutional investors and ESG (environmental, social, and governance) funds, Ecuador is a case to watch—especially if the government and industry stakeholders manage to establish policies that protect ecosystems without slowing export momentum.

The Rise of Alternatives to Traditional Chocolate

The Case of Planet A Foods and Cacao-Free “Chocolate”

Amid a cocoa market strained by scarcity, high prices, and environmental pressure, innovative companies are betting on disruptive alternatives. One of the most notable is Planet A Foods, a German startup that has developed a chocolate substitute that contains no cocoa but aims to replicate its flavor, texture, and physical properties.

Instead of the traditional cocoa bean, the company uses fermented and processed sunflower seeds to produce a powder with flavor profiles similar to chocolate. This “alternative chocolate” goes through the same tempering, mixing, and molding processes as conventional chocolate, allowing manufacturers to adapt without changing their production lines.

The company does not sell directly to consumers but rather offers its formula to established confectionery brands looking to reduce their dependence on cocoa and adopt more sustainable solutions.

Cost and Emission Comparisons with Traditional Cocoa

One of the main appeals of this alternative is price stability. While cocoa prices have tripled in international markets, sunflower seeds maintain much more predictable pricing, providing relief to manufacturers and investors concerned about commodity market volatility.

According to Planet A Foods’ own data, its “Sunflower Cocoa” generates up to 80% less CO₂ emissions than traditional chocolate. Additionally, because it is cultivated locally in Europe, it avoids the risks associated with global supply chains—such as logistical disruptions, conflicts, or questionable labor practices.

In the current context, where cocoa is scarce and historically expensive, this alternative positions itself as an economically competitive and environmentally responsible solution—though still nascent in terms of volume and global market penetration.

What Does the Future Hold for the Cocoa Market and Investors?

Needed Investments in Sustainability and Fair Wages

The cocoa market has entered a phase of profound transformation. The combination of collapsed harvests, fragile farming models, and growing global demand presents an urgent dilemma: either invest in a fairer, more resilient system, or face a worsening of the current imbalance.

For cocoa to remain viable as a global commodity, a structural revaluation of the entire supply chain is needed. This means, on the one hand, improving the incomes of smallholder farmers by giving them access to fertilizers, renewing plantations, and applying sustainable practices. On the other hand, it demands greater transparency from major brands, which currently retain most of the profit margins.

Experts agree that productivity can be increased without expanding cultivated areas—if agricultural technologies, regenerative practices, and credit access are incentivized. This vision aligns with ESG criteria, which are increasingly influential in institutional investment decisions.

Substitution or Diversification of Cocoa?

The case of Planet A Foods and its sunflower-based alternative suggests that total substitution of cocoa is not imminent, but it is becoming a real complementary possibility. In the short term, these solutions will act as a buffer—especially in the face of speculative spikes and climate risks.

For investors, the outlook presents high risks but also significant opportunities. Latin America—particularly Ecuador—emerges as a promising market with clear competitive advantages. At the same time, sectors linked to alternative foods, such as plant-based proteins or chocolate substitutes, offer access to fast-growing markets with a positive sustainability impact.

In a global transition toward more responsible economies, cocoa becomes a strategic indicator of what’s at stake: profitability, social justice, and ecological balance. The coming years will determine whether the industry can adapt—or if it will collide with its own structural limits.

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