Chocolaterie Pascoët, a small “laboratoire,” or factory, was a hive of activity on a recent morning. The team was scrambling to fill the last orders for Christmas.
A handful of chocolatiers quietly turned out fine pralines, the small squares moving over a conveyor belt to be coated with warm, dark chocolate. Other workers carefully packaged the morning’s output: fine Swiss chocolates that would be sold at a premium price: $32 for a box of 20.
Because of poor yields lately in producer countries like Ivory Coast, and a trend toward chocolate with a higher cocoa content, the global supply of cocoa has not kept up with demand. Chocolate prices in some markets are 40 percent or more higher than at this time last year.
Not that the market for premium Swiss chocolate is particularly price-sensitive.
Most of the chocolates produced by Chocolaterie Pascoët will end up in the company’s three small shops in Geneva or the one in Morocco, or be sold to an elite clientele, including customers as far away as Dallas and Tokyo. Nearly 40 percent will be packaged in elegant boxes bearing the names of prestigious companies like Rolls-Royce for corporate gifts.
Philippe Pascoët, the chocolatier who runs the business, produces a dazzling variety of flavors, from green-apple caramel and saffron to passion fruit. There is even a cigar-flavored praline he creates by chopping fine Havanas into pieces, infusing them with crème fraiche, and afterward extracting the essential oils.
The cigar-flavored treat is “a chocolate that should be eaten in its context,” he said. “If you had it at the end of a good meal with a strong alcohol — a Cognac, an Armagnac or a good whiskey — that would be nice.”
Chocolate confectionery is big business, providing more than 4,000 jobs in Switzerland alone last year and earning $1.8 billion in revenue, nearly half of it in exports, according to industry data. And those figures, which count big producers like Nestlé, do not include artisanal chocolatiers like Pascoët and scores of others in Geneva, Zurich, and other cities.
Worldwide, though, the supply of chocolate cannot keep pace with people’s appetite, analysts say, because of the cocoa shortage. Betting that prices will continue to rise, investors are flocking to cocoa futures.
“Production isn’t rising, at least not as quickly as demand, so that’s a recipe for higher prices,” said Michaela Kuhl, an analyst at Commerzbank in Frankfurt. The market imbalance has driven cocoa prices up by 40 percent since the lows hit in the spring, she noted.
While there are more factors in chocolate’s price than just cocoa, a shift in tastes toward dark chocolate is helping drive the cost increase. According to the International Cocoa Organization, cocoa makes up about one-tenth of the average chocolate bar. But dark chocolate is increasingly popular, and some contain more than 80 percent cocoa.
Chocolate prices in the United States, for example, are on track to rise 45 percent from 2012, to about $5.75 a pound, according to Euromonitor International, a market research firm. And British consumers are paying 25 percent more this year for chocolate bars than last, Mintel, another research house, estimates.
No shortage is evident 80 miles northeast of Geneva in Broc, where Nestlé’s premium-brand Maison Cailler factory has been humming away ahead of the holidays. Cailler, founded in 1819 but part of Nestlé since 1929, makes its product from scratch, starting with raw cacao beans and milk from cows that graze on the meadows nearby.
Cailler’s annual output dwarfs Pascoët’s. It roasts as much as 20 tons of beans a day, more than he sells in finished chocolate each year.
But the two producers are united by their need for cocoa, which comes from mostly poor countries near the equator, led by Ivory Coast, Ghana, and Indonesia.
The cocoa shortage stems partly from falling yields in Ivory Coast, where investment has been insufficient and rains unaccommodating. Nestlé, which also makes mass-market chocolate like its Crunch and Kit-Kat bars, is the biggest consumer of cocoa, and has to worry more than most about supply.
José Lopez, executive vice president, is confident the market will solve the shortage through higher prices, as farmers who might otherwise switch to rubber or palm oil trees step up their cocoa production. Keeping supply and demand in balance will take some doing, however. One looming problem may be global warming, which some studies suggest will further reduce production as drier growing seasons reduce yields.
But the biggest challenge may be the global market. Western chocolate consumption is growing slowly, but emerging markets are booming. China’s 1.3 billion people, for example, each eat just 44 grams of cocoa each year. But the market is expanding fast, especially among the newly wealthy.