The price of cocoa has spiked in the past year, a trend directly impacting chocolatiers in Missouri. In April, prices hit an all-time high of $9.74 per kilogram, according to YCharts, an online provider of investment research.
Although prices have dropped since the April peak, cocoa remains nearly twice as expensive as it was a year ago. At the end of November, prices were nearly $8 per kilogram, but cocoa was just over $4 per kilogram at the same time last year.
Small businesses selling baked goods, chocolates and other confections are facing challenges due to the rising cocoa prices. At Tsokolate Confections in Columbia, the increased cost has forced its owner, Jan Sanchez, to adjust her menu options.
“I’ve been offsetting the cost with adding more add-ins to the chocolate itself, so it’s not just plain chocolate,” Sanchez said. “Also, I’ve added cakes to my menu simply because the chocolate hasn’t been what it used to be.”
Accounting for price fluctuations is something that Sanchez has tried to keep in mind. She factored changing costs into her business model, raising her prices accordingly to offset increasing operating costs but keep her products affordable.
“I started my pricing off foreseeing the fact that the price of cocoa is going to keep increasing,” Sanchez said.
Other small business owners are finding creative ways to stay competitive in the candy market. Katie Alfheim is the owner of Conch: Chocolate Experience in Columbia, which makes its chocolate using a bean-to-bar technique that takes full control of the chocolate-making process from the cocoa bean itself.
However, she said using this process exposes the business to changes in raw input prices.
“Because I'm that middle piece, where I also do both chocolate making and chocolatiering, that cocoa price really makes a huge difference,” Alfheim said.
In light of rising costs, Alfheim is trying a new product that uses parts of the cocoa bean that may otherwise go to waste, called brewing cocoa. In chocolate itself, the outer husks of cocoa beans aren’t used, but her brewing cocoa uses those husks and every part of the bean.
“That way, there's zero waste with my business,” Alfheim said. “So it's a way to combat the rising cocoa prices, but also, it's an environmental sustainability thing, which is truly killing it. And personally, I think brewing cocoa is delicious, so why not sell it?”
Conch is also bringing seasonal specials to the table. An especially important one to Alfheim is peppermint bark, which can come in white or dark chocolate topped with peppermint pieces. Making the candy with white chocolate, which uses less cocoa than traditional milk or dark chocolate, can also help offset rising cocoa bean costs.
Brian Pelletier, the owner and chief chocolatier of Kakao Chocolate in Maplewood, is managing the high cost of cocoa by offering a wider variety of products.
“We've got other candies that we make that aren't all chocolate, and so that's part of our mix,” Pelletier said. “That’s stuff that we mostly don't need to mess around with on price.”
Businesses are also offsetting costs through collaborations with other local companies. Conch has partnered with other businesses in Columbia to host events, and Kakao has worked with Askinosie Chocolate in Springfield. These partnerships can get their chocolate out to more customers and vendors in their respective communities. Both businesses also sell their chocolate at farmer’s markets in their local areas.
But, these local chocolatiers are faring better than some in the industry. These businesses don’t buy “commodity chocolate,” which is the bulk chocolate that industry giants like Hershey’s use. Instead, they specialize in higher-end chocolate, which is a little more insulated to price shifts.
“We have been focused a lot more on specialty chocolates, so a little bit different, a higher quality, and that price has been high, but it doesn't fluctuate as much as the commodity stuff,” Pelletier said.
For Alfheim, top-choice cocoa beans are something her craft chocolate business requires, and she’s always had to pay higher prices for quality ingredients.
“It's really all about the cocoa,” Alfheim said.
