Rise in cocoa: what impact for Luxembourg consumers?

It is the flagship element of the end-of-year celebrations. Chocolate. We offer it, we receive it, it is an integral part of the habits and customs practiced in Luxembourg and more generally in Europe. We have heard it in recent months: the world price of cocoa has literally skyrocketed. What is the impact for Luxembourg chocolatiers? And above all, should the customer expect to see prices continually increase as well?

“The world price of cocoa has increased by more than 250% in one year. You should know that it had already increased by 200% the previous year,” recalls Alexandra Kahn, director of the Genaveh chocolate factory. “This is unprecedented in the history of chocolate. It becomes a real luxury product!” The price of chocolate is exploding and the price, governed by the stock market, does not spare the chocolatiers.

At Genaveh, the cocoa beans come from Peru for the dark chocolate. Milk chocolate is produced from beans from Sao Tome and Principe, an island located in the west of Africa. “For Peruvian beans, global demand is growing and at the same time, overall production is declining: climatic conditions are unfavorable between droughts and high temperatures,” explains the director of Genaveh.

The chocolatiers have not changed their recipes: “The only thing that has changed is our margin,” emphasizes Alexandra Kahn. For beans used in milk chocolate, the director must deal with an increase of more than 20% in bean prices for 2024. And an increase in cocoa means a reduction in margin and by definition an increase in in-store prices. A criterion that gains momentum during the end-of-year holidays, when in the months of November and December alone, 40% of the year’s turnover is achieved.

“Customers would be “aware” of this reality:

Chocolate would cost “50 to 100%” more. Added to this is also the price of raw materials such as sugar, cocoa butter and hazelnuts. At Genaveh, their “bestseller” spread is made up of 47% hazelnuts. “We are positioned in a product that is high-end. A pleasure product, a gift product. We will continue to do what we do best and to innovate, but obviously with all these increases, we are faced with many questions.”

Should we fear a chocolate shortage?

Same story in Lola Valerius’ workshop. Changing the recipe to save on chocolate is not an option. “We cannot skimp on the quality of the product or the taste. We have to increase prices, all suppliers are making increases and it’s the same thing whether you are a small or a large company,” relates Lola Valerius, chocolatier in Esch-sur-Alzette. If its products present in the store are guaranteed “100% artisanal”, the professional depends on the couverture chocolate imported by its suppliers (Editor’s note: the chocolates are made on site, but the initial material is imported).

“Cocoa butter went from almost 13 euros per kilo to 41 euros in less than a year. For certain chocolates, it’s the same thing: white chocolate cost around 16 euros and now it is more than 30 euros,” explains Lola Valerius. In addition to prices, there is also the question of shortage. If the harvests are more subject to climatic hazards, the supply is less numerous and the demand is ever greater. “Our suppliers are no longer accepting new customers to be able to supply their current customers,” declares Lola Valerius.

The chocolatier admits that all other raw materials are also increasing and “fluctuating” a lot, whether butter, cream or almonds. “In Luxembourg we have the index, so if the index increases, all the prices of the raw material increase.”

Do without wholesalers to source beans

He is 26 years old, but immersed himself in chocolate when he was 14. This is why Gabriel Mjahed makes it a point of honor to select his cocoa beans as close as possible to small producers on the ground. Its current main supplier of beans is in Madagascar, it is a “small producer”. Gabriel Mjahed works directly with him:

He supports this choice with other arguments: knowing his producers better, paying them better, seeing the plantations and how the work is carried out there, checking that production does not lead to deforestation, but above all not suffering the live cocoa prices.

“Without counting raw materials, the increase that concerns us is transport. On the other hand, what will perhaps play a role, with regard to the rise in cocoa, is that the giants of the industry are starting to find small cocoa producers so that they can sell it to them. They highlight that the amount they have to offer is higher. The problem is that there is no longer enough cocoa in the world,” underlines the chocolatier from Dudelange.

Faced with this complex and not very encouraging situation, Gabriel Mjahed found a way to minimize the inconvenience linked to cocoa prices and climate change: buy in advance to lock in prices. “It’s December, if I manage to buy all my cocoas for 2025, I will benefit from the current price and if there is an increase, I am protected,” explains the chocolatier. To use this system, you must have cash, and you still have to have it: “we are talking about 50,000 euros, or even 100,000 euros to put in forecasts”.

Rethink the future of chocolate now

Gabriel is not the only one to use this technique, receiving the cocoa bean before processing it. The famous Luxembourg chocolate brand Oberweis adopts this strategy with its “bean to bar” bars. Directly processing the beans and cocoa and making its chocolate from A to Z, Oberweis does this for 25% of its products. “Thanks to this process, we can manage the roasting ourselves and find the best composition. The next step will be to develop a chocolate that is less fatty and sweet,” underlines Jeff Oberweis, co-director of Oberweis and chocolatier.

It must be said that Jeff Oberweis has a strong opinion on the future of chocolate. He does not hesitate to “clash” Dubai chocolate (Editor’s note: chocolate bar filled with pistachio cream and topped with a crunch), the one he considers reserved for influencers. “You won’t see Dubai chocolate at Oberweis, because proper chocolate should only contain cocoa.” The master chocolatier knows the land and the cocoa beans well. He goes, as much as possible, to the plantations (Colombia, Guatemala, Venezuela, etc.).

“You need good quality cocoa and, for that, it is essential that the three stages are respected: harvesting, fermentation and drying. To do this, it is necessary to establish a relationship of trust with the producers. It’s a real job to master the entire process,” emphasizes Jeff Oberweis.

At Oberweis, chocolates have increased by between 10 and 15%. “There was the war in Ukraine which had the effect of increasing the price of sugar to more than 1 euro per kilo. Now, the price of sugar has fallen again, but it has never returned to €0.40,” emphasizes Jeff Oberweis.

Will all cocoa trees eventually be hybrids?

If climate change is harming cocoa trees, the trees are also subject to more and more diseases, notably that of witches’ broom. Remember that when a cocoa tree is planted, it takes five years for it to produce beans.

“Cocoa beans are traded by the world’s largest cocoa producers, such as Nestlé, the Callebaut group. They buy large volumes and 80% of world production comes from African beans. For small cocoa producers, what matters is ensuring sustainability for their children. However, among European family chocolate entrepreneurs, 1/3 will stop tomorrow,” explains Jeff Oberweis.

To counter ever-increasing global demand, a hybrid species of cocoa tree has appeared on plantations: CCN51. It would be more profitable and allow better returns. This is how the giants of the industry come to find small producers so that they can change their pods with, very often, the promise of becoming rich.

These hybrids designed to increase production capacity are a real turning point in the history of chocolate.

“I have no clear opinion on this, I have only read different opinions on hybrid cocoa trees: some claim that even if the tree is hybrid, it is like a pollinator tree and that at After five years the tree still changes.”

“The new trend is to put less cocoa butter in chocolate. For cocoa butter, there are only a few manufacturers in Europe. Pure origin is complicated, because cocoa butter, you never know where it comes from precisely, so you necessarily ‘cheat’ on a percentage,” explains Jeff Oberweis.

In the Oberweis workshops, we are already thinking about the next step: the calories of the products, the checking of allergens with one goal: to constantly improve the products. Putting less packaging or developing vegan pastries are already in the pipeline, this currently represents 5% of demand.

What will be the future of chocolate? If it is difficult to evaluate it at the moment, one thing is certain, the prices of raw materials continue to fluctuate: “In some of our recipes we use vanilla, I have already known figures of 800 euros per kilo of vanilla, but it ended up coming down to around 400 euros.”