Turning threat into opportunity: How Cargill is navigating the global cocoa crisis
According to the International Cocoa Organization, global cocoa supply is projected to decline by nearly 11% to 4.449m tonnes in the 2023-2024 season, compared with 2022-23.
This is primarily caused by “catastrophic harvests” in Ghana and Ivory Coast, which are responsible for over 60% of the world’s cocoa supply. Consequently, cocoa prices have hit record highs, warranting action from confectionery manufacturers and chocolate makers.
In the face of this crisis, Cargill is drawing on its extensive cocoa sourcing networks and innovation expertise to help customers address current challenges, and ensure consumers still get to enjoy chocolate products.
“Cocoa supply is indeed a pressing issue for the industry. Cargill is a bean-to-bar solutions provider, which means that we have the capabilities to innovate along every step of the value chain, from sourcing of raw materials to product customisation and solutions provision. For example, we are able to provide Asian-sourced cocoa products as we source globally.
“Right now, we are actively reaching out to our customers to see if they need support in managing this situation, such as sourcing, alternative recipes and product trials. We are able to tailor-make cocoa powder for a certain flavour and colour, and combine different ingredients to create new solutions or replacements,” Xiaoling Liu, Indulgence Leader, Food Solutions Asia Pacific at Cargill, told FoodNavigator-Asia.
Speaking to us at the recent FHA-Food & Beverage 2024 trade show in Singapore, Liu added that Cargill’s priority is to work with its customers to make sure their production remains unaffected and they can continue to serve consumers.
“Cocoa is just one of the product categories that Cargill has. Because we have such a broad portfolio, we are able to offer our cocoa and chocolate customers a wide array of ingredients and solutions, such as sweeteners, specialty fats and edible oils, to meet their needs.
“For instance, our specialty oils facilities in China and Malaysia are developing alternatives for cocoa butter. With every threat comes an opportunity. There are many players like Cargill that are working hard to mitigate this crisis, which has pushed companies to innovate. I think it’s good for us as an Asian player to step up and provide viable alternatives.”
Sustainability efforts
Over the past decade, Cargill has “proactively invested” in driving sustainability in the cocoa industry.
Established in 2012, the Cargill Cocoa Promise is a programme to help farmers and their communities achieve better incomes and living standards, while growing cocoa sustainably and maintaining a steady supply of cocoa and chocolate products.
Through this programme, the company works closely with industry partners and stakeholders, including local farmer organisations, government agencies, and NGOs.
Building on the efforts and results of the Cocoa Promise, the firm aligned its ambitions with the United Nations’ Sustainable Development Goals (SDGs) in 2017 and introduced a set of Sustainability Goals.
This framework has enabled Cargill to broaden its indirect cocoa supply chain and the sourcing of other ingredients used to produce chocolate.
Notably, Cargill has been accelerating sustainable cocoa-sourcing practices in Indonesia for more than 10 years.
In 2014, the firm opened a cocoa processing plant in the country, which also houses Asia’s most advanced cocoa development centre.
“Later this year, the cocoa development centre in our Gresik plant is set to complete enhancements that will allow faster prototyping, and that will support the development of premium cocoa solutions through flavour and colour customisation,” Liu shared.
In Singapore, Cargill operates the Aalst Chocolate manufacturing plant that exports products to over 50 countries, as well as the Chocolate Academy, which serves as a hub for innovation and co-creation with its customers.
