Cocoa price rise getting bitter in India? Chocolate makers, restaurateurs, bakers shed light

"Most chocolate prices have experienced an exponential hike. While the majority are twice as expensive as they were only two months ago - some chocolates have seen up to a 300 per cent hike in their prices," shares chef Prateek Bakhtiani, who runs The Ether Atelier Chocolat, a desert, confectionary and luxury chocolate brand in Mumbai.

He adds, "As you can imagine this is devastating to the bottom line of a completely chocolate-centered brand such as Ether." With each passing day, the rising prices of cocoa are reaching different parts of the world, and it is no different for India. Even as people celebrated World Chocolate Day around the world on July 7, not everything is sweet for Indian chocolate makers, restaurant owners and bakers among other stakeholders in Mumbai and India. At such times, they have to rely on bringing out their trade tricks to sail through the cocoa crises but for how long will they have to do it?

Earlier this year, chocolate makers worldwide experienced the weight of the cocoa crisis that is leading to rising prices of cocoa beans. In a trickle-down effect, it has also affected restauranteurs and bakers in India. According to the global research done for the insights report by JP Morgan titled ‘Will rising cocoa prices trigger a chocolate crisis?', the cocoa crisis can be attributed to the global supply shortage that has directly led to a rise in the prices. The report says the shortage though has been further attributed to a global warming-induced drought that has ravaged crops in West Africa, which contributes to 80 per cent of the world's cocoa output. According to the International Cocoa Organization, global cocoa supply will decline by almost 11 per cent over the 2023 - 2024 season, adds the report. Being at the centre of the evolving culinary landscape in the country, Mumbai is no stranger to its effects.

Dealing with the bitterness of cocoa
With the impact being felt locally, Bakhtiani who uses Belgian-Swiss chocolate manufacturer Barry Callebaut's Cacao Barry, French premium chocolate Valrhona and Swiss chocolate Felchlin to name few, has reached an impasse, especially because settling for anything less would compromise their quality and that is one aspect of making chocolate he cannot digest.

He explains, "We are - as we have always been unrelenting in our dedication to quality. There is a reason that we picked the chocolates that we chose to work with in the first place, and in the interest of this artistic integrity we have no choice but to stick by buying them at whatever price that we can get them." For better or for worse - come hell or high water, the Mumbai chef says he believes too strongly in the quality of and the artistry behind his current recipes to change a thing.
Without substituting the quality of the chocolate, he uses, Bakhtiani and his team have found a way to circumvent the cocoa price rise. "We are refocusing our marketing efforts to a short-term focus on products that are not almost entirely made of chocolates - think a chocolate cake which is a lot less chocolate dense than say a chocolate bar," he shares, continuing, "I hope that this temporary strategic change will help us float over the tide - until we can switch back to regular scheduled programming hopefully in the fall."

The benefit of growing cocoa in India
Just like Bakhtiani, Vikas Temani, founder and CEO of Paul & Mike, another Indian chocolate brand based out of Kochi, has also faced challenges from the increasing prices of cocoa but they have been able to counter it in different ways. For starters, Temani explains, "We have successfully managed these rising costs by sourcing a significant portion of our cocoa from our farms and using advanced agricultural techniques to maintain quality and sustainability. Initially, we were not as affected as other brands that outsource their cocoa beans, but we did eventually feel the impact later."

The south India-based award-winning bean-to-bar brand, which also grows its cocoa, has been able to source a significant amount of its cocoa from their farms in Kochi and Coimbatore. "Additionally, we utilise modern agricultural techniques such as precision irrigation, pest management, and innovative farming practices. We also offer limited quantities of cocoa beans and baking chocolate at old rates to support small artisanal chocolate makers and home bakers," he adds.

At a time when many businesses may have to consider increasing the prices of their chocolate or chocolate-based dishes, even Paul & Mike, which has initially hoped not to increase their prices had to succumb to it. Temani says, "We had pledged to maintain stable prices for their popular chocolate-based products over the initial three months but now the prices are updated and forced to hike, diverging from the industry's trend of price hikes." Unfortunately, it comes at a time when artisanal chocolate has become more popular in the last few years than ever before, as people have learned to not only appreciate good chocolate but one that is made in India, as the country sees growth in many independent brands like Mason & Co and Soklet to name a few others.

Finding alternatives to chocolate
Even as luxury and bean-to-bar chocolate brands are facing the bitterness of cocoa, restaurants are also facing the heat as they bring out chocolate-based desserts to the diner's table. The global rise in cocoa prices has posed challenges for many including us as our beloved chocolate dishes faced potential cost increases. Syesha Kapoor, associate director, Silver Beach Café, shares, "The global rise in cocoa prices has posed challenges for many including us because our beloved chocolate dishes faced potential cost increases."

However, they took this as an opportunity to innovate. She adds, "To maintain quality without raising prices, we forged closer ties with local and ethical cocoa suppliers, ensuring fair trade and premium quality beans. Our chefs also experimented with new recipes, blending cocoa with locally sourced ingredients to create unique flavours." The restaurant in Juhu expanded its dessert menu, offering a variety of options while still keeping our chocolate classics. While the prices of the dishes haven't increased, their menu includes Hot Chocolate and Chocolate Fondue, Chocolate Almond Crunch, Crunchy Nutella Mousse and SBC Keto Chocolate Pastry that people can still enjoy.

Even Sarfaraz Ahmed, corporate Chef India at Passion F&B, Carnival by Tresind, Avatara and Tresind under their banner, has decided to deal with the rising cocoa with an innovative approach. He explains, "As an Indian restaurant, we are fortunate to have a variety of options that do not involve cocoa. However, we are also exploring the use of Carob as a chocolate alternative and are currently experimenting with it to ensure the final product meets our standards."

Beyond innovation, Ahmed believes escalating prices of cocoa have become a significant concern for many restaurants, especially those crafting chocolate-based dishes. "In the past year alone, cocoa prices have surged fivefold, posing a serious challenge. Since passing on these costs to customers isn't feasible, chocolate lovers might soon face disappointment. Many restaurants are expected to discontinue chocolate-based offerings by next year, opting instead for alternative ingredients," he adds.

Chef Aditi Handa, co-founder and head Chef, The Baker's Dozen, has also been a part of the chocolate industry that has been affected. She explains, "It is impacting everyone who is making a chocolate product, the ones making products from couverture or compound. Although the price hikes have stabilised, they are still 3-5 times the base price about a year ago."

With The Baker's Dozen being known for its bread and bakery items, Handa says the sale of their cookies especially has taken a massive margin hit. "However for the moment, discontinuing the product is not an option. Too many loyal customers will be impacted by this," she says, continuing, "We are taking the business hit while trying to develop better purchasing power to make up for this." At the same time, like Kapoor and Ahmed, she says some research and development for newer products is also happening to see if alternates can be developed. "Some of the business hits are getting cushioned by pick up in non-chocolate products," she adds.

Challenging times for smaller players and home bakers
While chocolate makers and restaurants are still making use of chocolate on a larger scale, it will still affect smaller players. Highlighting some of the biggest challenges for smaller players, Temani says, "They will have difficulty managing the increased costs of cocoa. They will also struggle to maintain profit margins without raising product prices. Additionally, they have limited resources to invest in sustainable farming practices and modern agricultural techniques." It will also lead to potential disruptions in their supply chains and production processes due to the high costs.

So, where do the rising cocoa prices leave home bakers? Vasai-based Kadambari Lobo, who has been running The Cake Next Door and The Bread Next Door with her sister Jessica Lobo for over nine years now, expresses, "It has affected us greatly because we are a small kitchen and because we use coverture chocolate exclusively, the sudden rise in prices has made it extremely difficult for us on many levels."

Known for their desserts such as cheesecakes and even wedding cakes in the Vasai-Virar region, they do not have the luxury of keeping their prices at the same rate it was a few months ago. "We had to increase the prices of all chocolate-based options because for us there is no other way out. The price of chocolate itself has increased by over 200 per cent in recent times. However, we have not increased it too much because that would be bad for business," adds the home baker.

Being a home baker, they also do not get the luxury that many large-scale chocolate makers and restaurants have. "With the high cost, we cannot do any new trials or waste chocolate because it is extremely expensive right now." While the sister duo is still looking for an alternative, they have added more non-chocolate cakes to their menu so that it is affordable for clients. "Fortunately for us, most of our clients are ok with the price hike but there is a section that genuinely cannot afford it," adds Lobo, who is not suffering alone.

Even Rhea Kanthirao, another Mumbai-based home baker, who has been running Butterstick Patisserie, for over six years now, has been feeling the pinch and has had to resort to more non-chocolate dishes on the menu. "I've been trying to focus more on non-chocolate flavours. Trying to get clients to go for cream cakes, fruit/nut and vanilla-based desserts. Most customers have also been understanding regarding the increased prices."

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However, not all have been kind because the 32-year-old believes that apart from increasing the prices by 10 - 20 per cent, the bigger challenge has been to explain it to the customers in a way that was justified. It also highlights how most customers want lower prices but do not realise the implications of cocoa prices even on a small player like Kanthirao in the market. She says, "As home bakers operate on a smaller scale, even little changes in our ingredient costs affect our profit margins. In comparison to large commercial bakeries who source their ingredients in bulk."

At a time when everything is becoming expensive, the rising prices of cocoa are only burning a hole in the pockets of home bakers like Kanthirao and the Lobos. "We feel it will be difficult to sustain because along with chocolate other materials have also become expensive. So, all we can do is try non-chocolate options and pray for the best," concludes Lobo.

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