At Miam Pâtisserie in Delhi, chef-founder Bani Nanda deftly glazes a Belgian chocolate cake. Her skill is impeccable, yet her distress is apparent — and the sweltering heat outside has little to do with it. Around 60% of the pâtisserie’s menu is chocolate-based; they get close to 60 chocolate cake orders on average a day, and their other chocolate desserts are perennial bestsellers. Even during mango or strawberry season, roughly 12-15 kg of chocolate go into their creations daily, and much of that is sourced from imported brands such as Callebaut.
“The soaring cocoa prices globally have meant a massive hike, 110% to 200% in some cases, in the prices of our primary ingredient — chocolate,” Nanda says. “We’ve already increased the prices of all our chocolate items by 5%-7%, from cakes down to a macaron. We’re trying to hike it slowly so as to not shock the customer, but our focus now is to start experimenting with more non-chocolate flavours.”
The price of cacao beans, the primary raw material for chocolate, skyrocketed to a record $12,000 a tonne in April, owing to extreme crop shortages and dangerously low liquidity on the commodities market. A combination of factors are at play. In Ghana and the Ivory Coast, the West African nations that produce the major share of the world’s cocoa beans, a bad harvest season has been brought on by El Niño weather conditions, black pod disease and ageing cacao trees. Additionally, historically inequitable market practices with big chocolate corporations pocketing the bulk of the profit, have left farmers with critically low incomes to replant new trees or implement disease prevention measures. In fact, the global chocolate crisis is such that top trader Pierre Andurand has forecast cocoa futures to climb as high as $20,000 this year, while a UN Trade & Development report states that the International Cocoa Organization is expecting a global shortfall of 3,74,000 tonnes for 2023-24 as compared to 74,000 tonnes last season.
A heavy blow
In India, importers and suppliers of cocoa and chocolate brands such as Valrhona, Callebaut, Van Houten and others are also facing the fallout of the war raging in West Asia. “We import cargo by sea and with the crisis in the Red Sea, all cargo prices have shot up by 20%-30%. On top of that, the rupee has weakened by 10%-12% in the last six months, which has also made an impact since we buy in euros and dollars,” says Dhruv Sanghvi, senior manager at Delta Nutritives Pvt. Ltd., the prime suppliers of Callebaut and Cacao Barry in the country. According to him, the prices of these products have already shot up by 50% and are expected to increase to 100% plus by October. “There’s a lot of volatility in the cocoa price index, and even if the prices go down today, it’ll take five to six months for that to reflect in India.”
For the time being, suppliers like Delta have enough stock to last another six to eight months, so there may not be an apparent shortage of chocolate in the market yet. But for professionals like Nanda, who deal with cocoa and chocolate daily at higher price points, the price surge is dealing a heavy blow already.
Home baker Ipsa Sambhi was excited to embark on a new journey with her brand La Croute. The self-taught baker who has been delivering homemade pies since the lockdown, is slated to open her first café in leafy South Delhi soon. Her happiness though is mired with concern now. “I not only make five to six desserts with chocolate, but also use it in savoury sauces. Every day, I use around 2-5 kg of white, milk and dark chocolate, and the price hike is impacting my cost of production,” says Sambhi. “I do not intend to remove chocolate from my menu entirely, but I definitely have to keep it to just a couple of signature items for now. Once the cafe launches, I may have to increase the prices of my chocolate items, reduce portion sizes, and negotiate with suppliers for better deals.”
Bitter cost of indulgence
In Chennai, Ricky’s Cookies has made quite a name for itself in the past five years as an artisanal cookie brand. Almost 80% of their menu features chocolate in some form, including cocoa powder, cocoa nibs and cocoa butter, sourced from the likes of Valrhona and Callebaut, and Indian craft chocolate brands such as Paul and Mike, Mason & Co and Rakkaudella. “The prices of all these ingredients have gone up significantly. In fact, chocolate contains sugar and other ingredients, so the price hike isn’t as much in comparison as it is for cocoa powder or nibs that contain pure cocoa,” says chef Karthikeyan Jagannathan, who’s worked at renowned establishments like Alain Passard’s L’Arpège in Paris, as well as Avartana and Prego in India.
Panache, a 7-inch cookie with dark chocolate
For the time being, they’re bearing the losses themselves by reducing profit margins. “Our customers have come to expect a certain standard and specific flavour profiles in our cookies. Which is why we cannot reduce the chocolate content nor substitute a higher priced cocoa ingredient for another. We will not disturb the recipes of our signatures and bestsellers, come what may,” Jagannathan says.
His sentiments are echoed across the board by peers, including chef-founder Vinesh Johny of the reputed Lavonne Academy of Baking Science and Pastry Arts. The Bengaluru-based institute and cafe recently launched their Delhi outpost to packed houses, with enthusiasts queuing up for their breakfast viennoiseries and indulgent desserts. “India loves its chocolate; six of our 13 desserts are chocolate-based and those are our bestsellers,” Johny says. “We’re absorbing a lot of the costs at the moment and hoping that the prices correct soon. But if it becomes unsustainable or if there’s another big jump in prices, then we’ll have to rethink the entire operation.”
Bigger brands such as Theobroma, which is present in over 200 locations across 18-plus cities and massively popular for its brownies and cakes, are already in crunch mode. “A recent conversation with them revealed that they are planning to reduce their chocolate options to only one or two going forward. They intend to shift to either fruits or other seasonal produce,” says Sanghvi of Delta. “For suppliers like us, the demand for chocolates from such businesses has already gone down dramatically.”
Prices on a roller coaster
Mason and Co: Bulk pricing was ₹1,248 per kg (including tax) for 55% dark chocolate in the beginning of 2024. Now it is ₹1,793
Rakkaudella: Last year, 63% dark chocolate cost ₹861. Now, it is ₹1,770
Callebaut: 2024 started with 55% dark chocolate at ₹1,239. Last month, it increased to ₹2,124, and now it is at ₹1,994
Morde: Last year, 45% chocolate per kilo was ₹400. Now it has more than doubled, to ₹1,240
Van Houten: Has hiked prices by 100%
Valrhona: Expected to hike prices by 50%-100% (suppliers Euro Foods refused to comment)
* Prices approximate and as on June 3
Shrinkflation, skimpflation and other compromises
Chocolate producers are also resorting to covert tactics such as shrinkflation (reducing pack sizes) and incorporating more fruits and nuts. Nestlé reportedly confirmed that the size of their ‘fun size’ Kit Kat bars had reduced from 17 to 14 grams, as per a Yahoo Finance report, while Mars reduced the size of its large milk chocolate Easter egg from 252 to 201 grams, according to the Financial Times.
Chaitanya Muppala, founder of the Hyderabad-based craft chocolate brand Manam Chocolate, is of the opinion that certain industrial players may also resort to skimpflation, wherein they change their recipes or substitute with cheaper ingredients. “In India, we’ve been fed compound chocolate [made of cheaper fats like vegetable, coconut or palm oil] instead of couverture [made of cocoa butter and cocoa mass] by most FMCG chocolate brands,” he says. “The ones who didn’t do it before will start replacing cocoa butter with cheaper oils now. A lot of ‘speciality or premium’ chocolate brands too will play on this, assuming that consumers will not know the difference if they freely interchange the ingredients.”
As for popular chocolate brands in India and how they’re tackling the crisis, a spokesperson for Cadbury said that it was too early to comment, whereas no response was received from Amul at the time of writing this article.
“Most brands have at least a 60% dark chocolate variant, which means 60% of their recipe is going to be affected by the price increase. This makes a substantial impact on the costing. The milk chocolate segment is even more price sensitive because you need cocoa butter for that, the price of which has increased thrice as compared to cacao beans. I’m sure several brands have paused making milk chocolates for the moment.”
Nitin Chordia – Founder, Kocoatrait
Quality over all else
However, for most specialised professionals in India working with chocolate or cocoa products, cutting corners in terms of quality is unthinkable. When asked if he’d consider using compound chocolate instead of couverture, Johny of Lavonne is quick to respond, “I’d much rather not have chocolate desserts in my menu at all.”
Chef Nanda agrees that switching to cheaper compound chocolate is not an option for a pastry chef like herself. The way to circumnavigate the crisis is to educate the customer as to what is happening in the world of chocolate, gradually increase the prices of chocolate products, start sourcing more ingredients from Indian craft chocolate brands, and concurrently experiment with newer non-chocolate flavours.
A selection of pastries from Lavonne
Pivoting to non-chocolate creations seems to be the course of action for bigger players too, even those who may not be outrightly concerned about the price hike presently. At Taj Mahal Delhi, for instance, 10-15 kg of chocolate is used daily for their themed amenities, cakes and desserts at dining establishments such as Machan and House of Ming, as well as at the pastry counter at Emperor Lounge and for afternoon tea at the Taj Club Lounge. “We have a robust procurement system and our stock and supplies are managed accordingly,” says Salem Lepcha, the executive sous chef. “Seasonality plays a key role in our menu engineering; currently mango is taking centrestage.”
Bean to bar: the way forward?
Historically, India has been a consumer of cheap, mass-produced chocolate. However, in the mid-2000s, inspired by a similar trend in the U.S., a bean-to-bar movement was born in the country, pioneered by brands such as Mason & Co and Earth Loaf (now Naviluna). The emphasis was on complete control over the chocolate-making process, from sourcing or even growing their own cacao to crafting the final bar. The global price hike hasn’t spared such homegrown artisanal chocolate makers either. While they use cocoa sourced from organic farms in the cacao-growing states of Kerala, Karnataka, Andhra Pradesh and Tamil Nadu, they supplement this with cocoa from international markets. Moreover, as prices soared globally, cocoa from India too touched a record high of ₹1,000 per kilo in April.
But it’s not all cloudy on the horizon for craft chocolate makers in India. Manam Chocolate is barely a year old, but it has already created ripples internationally by bagging the prestigious International Chocolate Award. And Muppala believes the rise in cocoa prices could, in fact, be a boon in disguise for craft chocolate makers. “More and more people are making decisions based on the quality of what they consume. As the price of industrial chocolate increases, people who have not yet made the switch to craft chocolate may do so now.”
He’s also of the opinion that this may be an opportunity for India to produce fine quality cacao beans, which so far has been a novelty, as most of the cacao here is produced and fermented poorly, leading to a highly acidic and acrid flavour profile. Currently, Manam’s sister brand, Distinct Origins, is working actively towards enhancing the quality of cacao grown in the country. They have onboarded over 150 farmers in the West Godavari district of Andhra Pradesh and are using proprietary technology to improve the fermentation, drying and other post-harvest processes, while also mapping the qualities of cacao from various farms.
“The rise in cocoa prices globally has benefited cacao farmers in Andhra Pradesh. Some of us are focused on growing fine flavour cocoa beans, and wish to let the world know that India can also grow top quality cacao. We want to do business with those who give us equitable prices and support us with better farming practices. It’s no longer about high prices for us; it’s about pride in our land and what we can contribute to.”Boyapati Venkateswara RaoCacao farmer, West Godavari District
“The problem that we’re trying to solve is to transform the industrial genetics into fine flavour. We are planning to expand to other cacao growing regions in India,” says Muppala, adding that the recalibration of the market has also seen farmers planting more cacao trees. “What used to be written off as a tedious crop because the price was suppressed for so long has suddenly become lucrative. The new plants will take three to four years to bear fruit, so [in the future] you can safely expect a gross oversupply of cacao from India.”
Professionals like Nanda and Jagannathan already use Indian craft chocolate brands such as All Things Chocolate from Jaipur, Mason & Co from Tamil Nadu and Rakkaudella from Kerala, and more are willing to explore the market at home. “We are gauging the Indian craft chocolate market for B2B options that can take care of our bulk requirements and also perhaps collaborate on flavour profiles,” adds Johny.
The price of cocoa globally will take a while (up to two years, according to experts) to correct and stabilise, the production is expected to be at least 20% lower this year, and the demand is only increasing by the day given the world’s love for all things chocolate. In such a scenario, quality craft chocolate and fine flavour cocoa from India may be the way forward for not just professionals and consumers in the country, but it may also make the world sit up and look east, finally.
