An increase in olive oil and cocoa bean prices – due to extreme weather events worldwide and other factors – is having an impact on the speciality chocolate sector, according to an Olive Oil Times report.
The price of cocoa reached a record level of US$9,865 (€9,244)/tonne in April 2024 and had since fallen slightly to US$8,380 (€7,935)/tonne, the 31 July report said.
Before September 2023, cocoa prices had not exceeded US$3,600 (€3,300)/tonne in more than 30 years, Olive Oil Times wrote.
Global cocoa prices have increased due to various factors, including a failed crop due to bad weather, bean disease, smuggling, market speculation and illegal gold mining, which have reduced production and the availability of beans in Ghana, the world’s second-largest producer, according to the report.
Meanwhile, drought and high spring temperatures across the Mediterranean basin in 2023 and 2024 had resulted in consecutive years of poor olive harvests and decade-low olive oil production, the report said.
Against this backdrop, the International Monetary Fund’s benchmark olive oil price hit record highs in January at US$10,281(€9,446)/tonne and remained historically high.
Rising cocoa and olive oil prices have hit a niche market of olive oil chocolatiers, including K+M Chocolates, according to the report.
Founded in Napa, California, in 2017 by French Laundry chef Thomas Keller and Tuscan olive oil producer Armando Manni, the company makes its chocolate from a recipe that includes extra virgin olive oil and cocoa powder.
The method preserves the richness of the cocoa bean while providing health benefits by substituting cocoa butter with extra virgin olive oil, according to the company.
“The price of cocoa has caused an enormous strain on chocolate producers everywhere,” K+M Chocolates’ general manager Hallot Parson told Olive Oil Times.
“We are lucky to have a decent inventory of cocoa beans, but cocoa butter has become particularly costly.”
The company typically paid US$8-US$9 (€7.40-€8.30)/kg for organic cocoa butter from 2019 to 2023, while the current price was around US$36 (€33)/kg, Parson said.
“If we were to buy a 12.5 tonne container, which is far more than we need or could afford, the price only drops to US$26 (€23.8)/kg plus shipping from South America,” he added.
To date, K+M Chocolates’ use of extra virgin olive oil in place of cocoa butter in various products had protected the company from historically high prices, Parson said.
“So far, we haven’t had to raise our prices on retail chocolate bars. This is largely because we use olive oil instead of cocoa butter for many of our bars.”
However, as the company also produced premium chocolate for pastry chefs and restaurant use, these applications required good chocolate fluidity, which was mainly provided by a higher cocoa butter content, he said.
While the company had not raised its prices, Parson said large European chocolate producers, who historically dominated the market, had been impacted by rising food service prices.
In addition to rising prices for raw materials, Parson said the company faced challenges with its expansion into Asia due to transport logistics and costs.
“We have exported to Korea several times, but … it has proven too costly to establish a presence there,” Parson added.
