Rising raw material prices and increasing pressure on sustainability are prompting chocolate and confectionery companies to pour money into finding alternative ingredients for sweet treats.
Oreo maker Mondelez International was one of the investors in a $4.5 million seed funding round for cell-based cocoa startup Celeste Bio earlier this month, as well as British food ingredients company Tate. And Lyle also announced a partnership. BioHarvest Sciences develops sweeteners from synthetic molecules derived from plants.
The move comes as cocoa futures prices traded in New York exceed $10,000 a tonne, continuing a dizzying rally that began a year ago. The price of chocolate, a key ingredient, peaked in April at more than $12,000 per tonne, almost tripling since January.
Producers in West Africa, which produces more than two-thirds of the world’s cocoa, are facing a double whammy of climate change-induced disease and severe weather, curtailing production and deepening the global bean shortage. .
“If we don’t change the way we source cocoa, there won’t be chocolate in 20 years,” said Michal Beressi Golomb, CEO of Celeste Bio. With cell-cultured cacao, the industry “doesn’t have to rely on nature,” she added.
Golomb said global shortages and record prices have led to a surge in interest and investment from chocolate and confectionery companies. “They are very concerned about having a sustainable and stable supply of high-quality cocoa,” she said. “Everyone wants to be at the party.”
Founded in 2022, the Israeli company is one of a growing group of startups that use cell culture technology to circumvent the need for traditional farming methods, which are susceptible to climate change and market volatility. It is one.
These innovations may also offer solutions to regulatory challenges, such as the EU’s new deforestation regulations, which require proof that products such as cocoa are not grown on deforested land. , which could put further pressure on supply chains and prices.
Other groups are looking at ways to make sweet treats using more easily available alternative ingredients. Last year, Finnish confectionery company Fazer launched a limited edition cocoa-free “chocolate” made from locally grown rye malt and coconut oil. The Helsinki-based company has also been working on growing cell-based cocoa pods since 2022 in collaboration with VTT, Finland’s state-run research centre.
“Nearly four years ago, research showed that climate change would impact the availability and price of cocoa,” says Annika Poe of Father Confectionery’s Forward Lab. “This year it became a reality.”
In addition, Cargill, the world’s largest agricultural trader, last year partnered with Voyage Foods, a startup that produces sustainable foods such as chocolate and nut spreads without traditional ingredients such as cocoa, peanuts and hazelnuts. We partnered. We accomplish this using grape seeds, sunflower protein flour, sugar, fats, and natural flavors.
“When we started, cocoa prices weren’t in the news. Most people living in the US or UK probably couldn’t point out where their cocoa was grown. And now that prices are rising, it’s much easier to understand why this is necessary,” said Adam Maxwell, CEO of Voyage Foods. .
Consumers are looking for “more sustainable luxury that tastes great and is made without nut or dairy allergens in recipe formulations,” Cargill added.
While prices for sugar, whose volumes are not included in EU rules, have remained relatively stable, the industry is also under increasing pressure to address its environmental footprint and meet consumer demand for healthier options. facing.
Once a sugar producer and now a sugar reducer, Tate & Lyle is working with startup BioHarvest Sciences to develop synthetic sweeteners derived from plant cells.
BioHarvest Sciences has invested $100 million over the past 17 years to develop technology to extract and expand key plant compounds that provide sweetness while reducing bitterness.
The partnership could help Tate & Lyle distance itself from ultra-processed foods, which have come under scrutiny from investors and scientists.
“Our customers and their consumers are looking for cost-effective, natural products,” said Abigail Storms, senior vice president at Tate & Lyle, which sells to packaged food companies such as McVitie’s biscuit maker Pladis. I’m looking for something.”
Fluctuations in commodity markets may prompt investment in substitutes, but growing raw materials in labs rather than in trees or fields isn’t cheap.
Golomb said Celeste Bio could reach the market and expand production by 2027 to match cocoa prices before 2024 (about $7,000 per tonne for cocoa butter and $3,000 per tonne for cocoa powder). The aim is to reach the cost.
Tate & Lyle also wants to ensure that the price of products made using its sweeteners does not exceed “a full calorie or full sugar replacement,” Storms said. spoke. “The key is to democratize these benefits.”
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Breaking away from traditional commodity markets is also a battle against bureaucracy and changing consumer expectations. Fazer Group’s cocoa free bars, for example, cannot be called “chocolate” and are instead labeled “candy tablets” due to EU rules for naming products containing cocoa.
Cell-based cocoa faces a similarly tough regulatory maze, Poe said, and “novel food” approvals are likely to jump faster in the EU than in the US.
Winning the hearts and minds of consumers may be equally difficult. Fazer Group’s initial research suggests transparency about how cell-based cocoa is made could help sway public opinion, but taste and texture are the ultimate test said Poe. “Consumers really expect a taste and feel similar to traditional cocoa,” she said. “There is still work to be done.”
