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R e s t a u r a n t D a i l y N e w s S u n d a y, M a y 1 7 , 2 0 1 5 5 8 COCOA PRODUCERS CONFRONT DROUGHT, BLIGHT AND EBOLA AS PRICES RISING, SUPPLIES LIMITED It may be a bit premature to start hoard- ing Hershey's Bars and stockpiling bags of semi-sweet chocolate chips in the freezer, but experts are predicting a cocoa shortage is on its way. Experts fear that recent drought conditions in West Africa (the top cacao-producing region in the world), combined with plant diseases, could severely impact cocoa production going forward. In Mexico, the historic birthplace of chocolate, commercial cacao farmers have been almost com- pletely eliminated as the result of dis- eases like Frosty Pod Rot, a blight which attacks the fruit of the cacao tree. Making matters worse, global demand for choco- late has never been higher, with emerging markets such as India and China gob- bling down boatloads of the confection. As a result, cocoa producers are unsure if they will be able to adequately meet global demand going forward. With cacao demand on the rise, and supplies limited, chocolate prices are creeping upwards as well. Last summer, Hershey's, made waves when it announced that it was raising prices on its chocolate confections by about 8 percent – the company's first price increase in three years. Mars quickly followed suit, indicating that it would raise the price of its chocolate products by about 7 percent. Higher prices in the candy aisle are a direct result of higher commodity prices in global futures exchanges. According to the Wall Street Journal, in 2014 alone, the price of cacao skyrocketed 18 percent. Now, an emerging threat to global cocoa production is on the horizon, with the potential to seriously cripple cacao bean farming in West Africa: the spread of the Ebola virus. Today, the top cacao- producing countries in the world are Côte d'Ivoire (37.4 percent of global produc- tion) and Ghana (20.7 percent), with Cameroon (5 percent) and Nigeria (4.6 percent) coming in fourth and fifth. Although none of these countries are cur- rently experiencing major Ebola out- breaks, all of them are in close proximity with Liberia, Sierra Leone and Guinea, where the majority of Ebola-related deaths have occurred. In fact, Côte d'Ivoire, the most important cocoa pro- ducing country in the world, shares a 445-mile border with Liberia, the country most severely impacted by Ebola, as well as a 379-mile border with Guinea. In Côte d'Ivoire, the potential spread of the Ebola virus is just the tip of the ice- berg when it comes to the multitude of factors that have the potential to cripple the nation's cacao industry. Experts pre- dict cacao production in the nation to fall 8 percent from the previous year's har- vest in the 2014-2015 growing season. The anticipated drop in production has been attributed primarily to the migration of Swollen Shoot disease, a virus that attacks cacao plants, into the nation's western cocoa belt, reducing yield and ultimately killing trees. Cacao farmers in Côte d'Ivoire are being forced to cut down and replant infected trees. This is expected to limit production for at least the next several years. Côte d'Ivoire has unfortunately become a poster child for the social and environmental woes currently impacting the global cacao market. However, cacao producers in the country are hard at work today showing that the country is at the forefront of the movement to tackle these challenges head on and preserve the long term sustainability of the industry. The government of Côte d'Ivoire recently introduced stricter controls over the coun- try's cocoa industry, installing new quality standards, working to establish minimum prices for farmers and promoting Ivoirian- grown cacao on the global stage. The state is simply no longer willing to allow the market to entirely dictate the fate of the country's most important industry. When it comes to confronting Ebola, West African cocoa producers are refus- ing to sit back and watch idly while the virus makes its way across the continent. Global cocoa producers are actively working to protect farmers and the indus- try itself from being negatively impacted by the spread of the disease. The World Cocoa Foundation, an alliance of 115 chocolate companies representing 80 percent of the global cocoa market, recently raised $800,000 to fight Ebola and treat infected individuals in West Africa. Because cacao is often cultivated on small plots, with farmers then bring- ing their product to market through mid- dlemen, a disease like Ebola that attacks the population broadly and limits move- ment and interpersonal contact could devastate this industry. Ghanaian and Ivoirian growers are thus fighting to ensure that their countries are not the next battleground for the disease. "We look at the region as being very important," said Bill Guyton, President of WCF. "We thought it was a good move on our part from a humanitarian perspec- tive to help with the ongoing efforts on Ebola relief. We were happy to raise that money, and 100 percent of money raised has already been donated to two organi- zations: Caritas and The American Red Cross and Red Crescent." Although the three countries most severely impacted by Ebola produce only a miniscule percentage of global cacao stocks, and there have been no reported cases in the two largest cacao-producing countries in West Africa, Guyton believes that the importance of West Africa as a cacao-producing region necessitates a strong industry response to the epidemic. "When we first heard of the crisis of Ebola in West Africa, we were very con- cerned," he said. "It's something we need to keep our eyes on moving forward. There are positive signs that Ebola efforts underway are making the positive changes we were hoping for." Fighting plant disease and meeting global demand for the bean are proving to be increasingly difficult tasks to accom- plish, but producers are doing their best to protect their trees and increase their har- vests. The WCF is working to promote global cacao production through the recent introduction of its Cocoa Action plan. According to Guyton, a number of factors are contributing to limited cacao production in West Africa and throughout the world, including plant diseases, pesti- lence, aging (less productive) plants, lack of necessary fertilizers and an aging popu- lation of farmers. Through Cocoa Action, the WCF is working to solve these prob- lems, targeting 300,000 farmers in Ghana and Côte d'Ivoire, promoting productivity and community development and also working to eliminate child labor, improve access to education and incorporate more women as active participants in the indus- try. WCF is also working more closely with the governments of these two coun- tries in the service of its objectives. "We see a bright future for working more collaboratively and closely with governments to really make a transfor- mational change, and now is the time when we really need to step up our efforts," said Guyton. "We're looking forward to making as big an impact as we can in the coming years." For many in the cocoa industry, one specific move that is being promoted as a solution to the problem of diseased and less productive cacao plants is the move toward the propagation of hybrid cacao, a new breed of plant that has been engi- neered to be disease-free. Still, others are conversely promoting the deliberate prop- agation of heirloom cacao varietals. The Fine Chocolate Industry Association, for example, is spearheading the Heirloom Cacao Preservation Initiative, an effort to study heirloom cacao and target for pro- duction the heartiest plants and the ones that produce the best-tasting chocolate. According to Ed Seguine, FCIA member and President of Seguine Cacao, Cocoa and Chocolate Advisers, as researchers focus solely on producing hearty, disease-resistant cacao cultivars without considering taste as an important factor in breeding, the result will be a prod- uct that ultimately pleases no one. "There is a risk that in breeding, we will breed and lose all the diversity that we have in the field," he said. "There is a basic adage of breeding that you get what you measure. The great risk is that as you proceed with the breeding programs that exist today, if we don't include flavor as one of the meas- ured parameters, the risk is we will shoot ourselves in the foot and result in produc- ing 'the proverbial brown stuff.'" Research shows, Seguine argues, that focusing on cacao sustainability and flavor need not be mutually exclusive missions. He points in particular to the work of Wilberth Phillips, Chief of Genetic Improvement at CATIE (Tropical Agriculture Research and Education Center) in Costa Rica. In his work on breeding cacao plants that are resistant to Frosty Pod, Phillips was able to include taste as a measured criterion. Unbeknownst to Seguine, Phillips later submitted chocolate made from the culti- vars he developed to the Salon du Chocolate Cocoa Excellence Program (of which Seguine himself is chair) for judg- ing. The result: the disease-resistant sam- ples won awards for their fruit and floral flavor notes. "The FCIA is obsessively bent on doing everything that we can possibly do to preserve flavor. We need to preserve and measure flavors as part of the breed- ing program," said Seguine. "If you include flavor as one of the criteria, you will preserve cocoa flavor diversity. We've done it." Still, if the global consumer demand for chocolate continues to outpace cacao production, and if prices subsequently rise to a level that makes the product a luxury good, food companies may have no choice but to seek out more affordable and readily available chocolate substi- tutes. Companies that use cocoa butter in their products, for example, are increas- ingly turning to palm oil as an alternative ingredient. In addition, many confection- ers are experimenting with another bean, carob, as a potential stand-in for choco- late in their recipes for classic sweets. Colorado-based Missy J's is just one example of a specialty confectioner that is turning carob into a craveable chocolate substitute, crafting peanut butter cups and truffles that are entirely free of cocoa. "As the chocolate shortage story becomes more prominent, I think people are going to look for an alternative. They will want something that will still give them the same chocolate flavor and find the carob of today may be better for them," said Jodi Feinhor-Dennis, founder of Missy J's. "I've used my design and food skills to match the flavor profile [of chocolate]. Most carob from the past had a grainy, bit- ter taste. I just used every skill I had to make it taste delectable … Some people don't even know it's not chocolate." Of course, chocolate and cocoa- based products are certainly not going anywhere anytime soon, which means that confectioners are going to have to do their best to find their own unique ways to weather the oncoming storm. For many companies, the only thing to do is to raise prices in the candy aisle to make up for the higher prices being paid for cacao on the commodities market. However, some American specialty companies are doing what they can to avoid price increases, absorbing the increased costs themselves. New York-based Barkeater Chocolates, for example, has pledged to keep prices the same, despite the fact that it will almost certainly experience smaller prof- its at least in the near future. "The cost of being a chocolate com- pany has skyrocketed, but rather than pass it all on to the consumer, we have taken a smaller margin and have chosen to focus on our most popular products," said Jim Morris, co-owner with wife Deb of Barkeater Chocolates. "We will continue to offer our popu- lar products without changing the formu- lation or size. Chocolate should never be an elite item for a select few," added Deb. Despite the multitude of challenges currently facing cacao farmers, cocoa producers and chocolate companies across the globe, at least for the time being, the prospect of a major cocoa shortage that would broadly impact the consumer landscape is a small one. The largest chocolate manufacturer in North America, Hershey's, has publicly stated that there is enough cocoa already in the United States, that there will be no dis- ruption to chocolate supplies in this country at least until late 2015. This is true even if there is a major crisis affect- ing the industry, such as Ebola spreading into the major cocoa-producing countries of West Africa. This means that at least for the next year, outside of relatively small price increases, the average con- sumer should be unaware of the problems confronting global cocoa production.