8 ms·

The world's biggest chocolate-maker says we're running out of chocolate

86 points by r721 12y ago

jimhefferon 12y ago
Can we expect the deployment of US troops?
- krapp 12y ago
  I wouldn't worry about it. The US doesn't know what actual chocolate is, they won't even notice its absence.
  - adventured 12y ago
    Weak attempt at being funny. In fact, just about every grocery store in America has actual chocolate for sale. The US consumes immense amounts of all types.
    - _wmd 12y ago
      That's not actual chocolate, that's cocoa flavored sugar
      - maaku 12y ago
        The joke is that Americans only eat cocoa flavored sugar, such as is produced by the big commercial candy factories here. The GP pointed out that at any American store will sell you fine, refined chocolates, including (by implication)i mports from Europe, Asia, and South America. What was your point?
    - arethuza 12y ago
      Chocolate in the US does rather odd if you are not used to it - apparently this is due to a fondness there for the taste of a small amount of butyric acid in milk chocolate. http://en.wikipedia.org/wiki/Hershey_bar http://en.wikipedia.org/wiki/Hershey_bar
      - zzleeper 12y ago
        First time I tried an american chocolate (hersheys) I literally threw it away, as it smelled like poo. Only later I realized they all do :/ This may be the reason..
        ScottBurson 12y ago
        I've always disliked Hershey's milk chocolate. I didn't know why either; this must be the reason. We do have some excellent American chocolate, though: http://www.fearlesschocolate.com/ http://www.fearlesschocolate.com/
      - lobster_johnson 12y ago
        Of course, for their part, Europeans -- especially the Dutch, Finns and all of Scandinavia -- are very fond of ammonium chloride, used to make salty liquorice (often called salmiakki), which Americans generally seem to detest. What people grow up with matters a lot to what they find palatable.
    - Al-Khwarizmi 12y ago
      Quite accurate attempt at being funny, I'd say. In fact, of course actual chocolate is available in America, but most of the chocolate consumed there has such a low purity that it wouldn't even be legal to call it chocolate in other countries. In fact, the article itself mentions 10% cocoa content as being typical for milk chocolate. In Europe, the minimum required by law for milk chocolate is 25%. This kind of thing is why I wouldn't like TTIP to be ratified...
      - nly 12y ago
        Quoting[0]: "In the UK, chocolate must contain at least 20% cocoa solids. In the US, on the other hand, cocoa solids need only make up 10%. A Cadbury Dairy Milk bar contains 23% cocoa solids, whereas a Hershey bar contains just 11%." So both pretty close to the minimums. As a Brit, I personally don't like Cadbury Dairy Milk, far too coarse and sweet. When it comes to milk, I prefer the creamier and smoother brands. But then, to me chocolate isn't an everyday or even regular thing at all. When you look at dark chocolate you're looking at anything from 70 to 99%. When you get to about 85%, chocolate becomes a completely different experience. [0] http://news.bbc.co.uk/1/hi/magazine/8414488.stm http://news.bbc.co.uk/1/hi/magazine/8414488.stm
        masklinn 12y ago
        > When you look at dark chocolate you're looking at anything from 70 to 99%. Not that I disagree qualitatively (quite the opposite), but legally neither the EU nor the FDA have any such category, their highest categories are at 35% cocoa (respectively "chocolate" and "bittersweet chocolate")
        nly 12y ago
        Yeah I should have said "up to" 70 - 99%. The 70% stuff from Lindt is somewhere around my preference level. Funny you should mention 35%... Bournville (famous UK brand, now owned by Cadbury Kraft) is 36%. I still find it far too sweet.
        12y ago
  - mkaziz 12y ago
    This. I adore Cadbury's for example, but apparently Hershey's has a right to that brand in the US, and you have to go to an international store and pay an arm and a leg to get a genuine Cadbury chocolate.
    - MrBuddyCasino 12y ago
      Not to rain on your parade, but as someone who grew up near Switzerland, thats where the good stuff comes from. Cadbury is decent though. On a related note, I have always wondered why food quality is so different by region. For example, these are some categories where the good variety is hard to get in other countries: - belgian beer - swiss chocolate - italian mozzarella In this day and age where goods are shipped for almost nothing around the world, why do they still manage to sell inferior products without having a foreign competitor out-competing them with the better product? Is the foods market simply too price sensitive? Barriers to market entry too high?
      - mkaziz 12y ago
        Can you recommend some good brands I could order online?
    - 100timesthis 12y ago
      Not This. Cadbury's is just mud sold as chocolate, I can't even describe how bad it is.
      - yitchelle 12y ago
        But if your choice is limited, Cadbury's is not so bad. When I lived in Australia, the number of chocolate that I choose form is abysmal. There were offerings from Nestle, Cadbury's and some local offerings. The European chocolate like Lindt are quite expensive and are treated as luxury items.
      - mkaziz 12y ago
        I grew up on it ... I like it. :) It's not Lindor Truffle, but it's good, solid chocolate.
- weegy 12y ago
  They are running out of chocolate, not chicken mcnuggets.
raldi 12y ago
Why not just raise the price?
- adventured 12y ago
  That's exactly what the market will do. The world isn't going to run out of chocolate, the only thing that might happen is the price goes up, then a lot more cocoa gets planted or less people are able to afford it. Chocolate running out headlines have existed probably as long as newspapers and mass consumer chocolate.
  - abhaga 12y ago
    With diseases, world might actually run out of chocolate or at least some varieties of it. Like Panama disease wiped out Gros Michel banana and is now also threatening Cavendish banana. Similarly Frosty Pod Rot seems to be spreading and threatening cocoa plantations.
    - nmcfarl 12y ago
      That would be an interesting article, this one however was kinda pointless, as it appeared to be predicated on prices not rising, with only a tiny call out to frosty pod.
    - grayclhn 12y ago
      That may be true, but it's not mentioned in the article. Is there a good reference if anyone wants to read up on Frosty Pod Rot? edit: apparently it is mentioned in passing. oops.
    - mikeash 12y ago
      If the very existence of chocolate were actually threatened, the resources that will be made available to save it would be almost incomprehensible. People really like the stuff, and there is no real substitute. Bananas aren't that big of a deal for most people, especially if you're looking at going from two popular varieties to one. If the Cavendish gets wiped out too, I'd say that would just be due to people not caring all that much about bananas. I can't imagine the same happening for chocolate.
dghughes 12y ago
I wonder how Ebola will affect production since it's in the region where chocolate is produced. Isn't it weird chocolate native to South America is grown mainly in African countries and coffee native to South American is mainily grown in South America.
- RockyMcNuts 12y ago
  http://www.bloomberg.com/news/2014-10-22/nestle-says-ebola-in-ivory-coast-would-hurt-cocoa-output.html http://www.bloomberg.com/news/2014-10-22/nestle-says-ebola-i... http://www.pbs.org/newshour/making-sense/cocoa-traders-make-money-ebola-scare/ http://www.pbs.org/newshour/making-sense/cocoa-traders-make-...
matthewmcg 12y ago
Periodically, the big candy makers try to get the FDA to relax the definition of "chocolate" to allow non-cacao fats into the mix. This could signal the beginning of another lobbying effort. See a 2007 proposal here: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/26/AR2007042602824.html http://www.washingtonpost.com/wp-dyn/content/article/2007/04... "Chocolate lovers read that as a direct assault on their palates. That's because the current FDA standard for chocolate says it must contain cacao fat -- a.k.a. cocoa butter -- and this proposal would make it possible to call something chocolate even if it had vegetable oil instead of that defining ingredient. Whoppers malted milk balls, for instance, do not have cocoa butter."
- DanBC 12y ago
  This was a problem between the UK and the rest of the EU that lasted something like 25 years. http://news.bbc.co.uk/2/hi/europe/764305.stm http://news.bbc.co.uk/2/hi/europe/764305.stm http://news.bbc.co.uk/2/hi/uk_news/678141.stm http://news.bbc.co.uk/2/hi/uk_news/678141.stm I don't have a "golden palette" but I think I can tell the difference. ("Dairy Milk" is gritty; Galaxy is either creamy or greasy (but my prefered cheap choc) and they have different mouthfeel). Michel Cluizel is my prefered expensive chocolate, but that could just be because I like the box. I'm not sure I'd be able to tell the difference between that and other good chocolate if I was doing a blind taste test.
- matthewmcg 12y ago
  The current definition is here: http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?fr=163.111 http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRS...
grayclhn 12y ago
A more accurate title might be: "world's biggest chocolate-maker tries to prepare customers for higher prices by disingenuously claiming that we will run out of a renewable resource."
- huhtenberg 12y ago
  Exactly. I distinctly remember how several years ago Mexico manufactured Tequila shortage by claiming that disastrous weather led to a shortage of agave fruit. At least this was a story given by Canadian liquor stores to questions why Tequila prices were hiked by close to 50% almost overnight. I kid you not. They also issued assurances that once this pesky Mexican weather normalizes the prices will go back to normal. You guessed it - they never did.
  - fosap 12y ago
    See the HDD "shortage".
    - vertex-four 12y ago
      In that particular case, there was a shortage - it was extremely difficult for even large businesses to get hard drives. The issue was that hard drive manufacturers were (are?) clustered around an area that got flooded.
      - uptown 12y ago
        Or the shortage was caused by the NSA filling their new data-center with as much capacity as it could get its hands on, covertly, and the flood was used as a convenient cover-story for the shortage.
        Bluestrike2 12y ago
        Maybe the NSA even managed to engineer the flood itself? Yes, that sounds about right.
        12y ago
sneak 12y ago
We won't run out of chocolate. The supply is fixed, demand increases, price rises. Demand falls to match available supply. Chocolate will become more expensive. Not really a story...
- JshWright 12y ago
  How is the supply fixed? It literally grows on trees... The article mentions a few obstacles to increased production, but those certainly aren't insurmountable. Price increases will inevitably result in both decreased demand and increased supply.
  - tptacek 12y ago
    Those obstacles could easily be insurmountable at chocolate's current price point, which is the point of the parent comment.
    - JshWright 12y ago
      The GP didn't assume a stable price, they said the price would increase. I think it's very likely a price increase would result in increased supply.
- imaginenore 12y ago
  Chocolate becomes more expensive, more farmers start farming cocoa beans, prices go down, armchair economists make more wild predictions in the opposite direction.
vosper 12y ago
"Last year, the world ate roughly 70,000 metric tons more cocoa than it produced. By 2020, the two chocolate-makers warn that that number could swell to 1 million metric tons, a more than 14-fold increase; by 2030, they think the deficit could reach 2 million metric tons." How can the world be eating more cocoa than it produces? I can imagine there might be stockpiles, but surely they're gone if we're talking about year-over-year deficits. I think the article means that the demand for chocolate in 2020 could be 1 million metric tons more than supply. So prices will go up, and there will be an economic incentive for suppliers to increase production and for manufacturers to innovate with new products and efficiencies. Seems pretty normal.
- fennecfoxen 12y ago
  To be pedantic: if you're going to be all Economics about it, you can't say the world demands 2 million metric tons, because demand is a function of price. If the price goes up the quantity actually demanded will go down...
- masklinn 12y ago
  > for manufacturers to innovate with new products Oh don't worry they're already "innovating", though those filthy stinking regulations get in the way and stops them from innovatively selling cocoa-flavored vegetable oil as chocolate. Damn you, regulations!
SixSigma 12y ago
Mystery trader buys all Europe's cocoa 17 Jul 2010 The purchase was enough to move the entire global cocoa market, sending the price to the highest level since 1977, and triggering rumours and intrigue in the City. It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years. The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth £658 million. http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html http://www.telegraph.co.uk/finance/markets/7895242/Mystery-t...
- tedunangst 12y ago
  For those of use less familiar with the metric system, what's the conversion rate between Titanics and Olympic swimming pools?
  - reubenmorais 12y ago
    ~52.47: http://www.wolframalpha.com/input/?i=volume+of+the+titanic+%2F+volume+of+olympic+swimming+pool http://www.wolframalpha.com/input/?i=volume+of+the+titanic+%...
bane 12y ago
Solution: 1) Raise prices till consumption matches production. 2) Increase production. 3) Don't decrease prices. 4) Profit.
- tptacek 12y ago
  Doesn't that strategy require a step 3.5, "repeal economics"?
  - bane 12y ago
    Why? Increased supply doesn't guarantee lower prices...witness your average gas price up/down movement. Even a whiff of increased usage or decreased production drives prices up within a day. But it takes a global glut to bring them down over a period of years.
    - tptacek 12y ago
      Increased supply facilitates competition which drives prices down. If you artificially inflate prices, you leave room for competitors to seize market share without taking losses.
      - bane 12y ago
        Generally that's true, but there are cases where it isn't. Suppose you increase prices at a rate exceeding that which decreasing supply would demand, in collusion with other suppliers. You use the proceeds to increase wages. Some point in the future, supply increases back to normalized levels, but now the cost of supply has also increased (because you pay people more), so the wholesale prices remain increased. Prices can only drop back to levels of the new cost floor, or the cost floor has to be moved down somehow -- in this case reducing wages. We see a similar effect in oil markets because the cost of oil production has gone up as easy-to-exploit sources have dried up and more expensive sources have had to come on-line to meet demand. Production has actually increased but prices have stayed relatively high. This includes massive new production outside of OPEC cartel control, so even cartel price fixing doesn't account for it. Even more important, in a major market like the U.S., the distribution costs have dropped as a share of wholesale prices as domestic supply has come on-line. Consumers have simply gotten used to the higher prices so there's reduced pressure to lower them competitively in order to ensure sufficient demand to move target inventory volume. There's also other factors than pure supply/demand. Product differentiation can build in higher prices through perceived value (or other factors) in consumer's minds. Suppose over the next 10 years, the U.S. chocolate industry creates a marketing term "Savanna Chocolate" and starts rebranding all products by percentage of "Savanna Chocolate" they contain. "Now with 5% Savanna Chocolate!", supplemented with a marketing campaign to push all products as "Savanna Chocolate". The term is meaningless. However, it allows them to charge a 10% premium on product which helps guarantee higher prices. Because Savanna Chocolate is not a thing, there's nothing to compete against, it's also trademarked. A competitor can't simply start selling their cheaper "6% Savanna Chocolate" competitor because they'll be sued into oblivion, if they wish to use the term, they'll probably just be charged a license fee large enough to ensure price compliance. All they can do is start an information campaign to try to persuade the public that Savanna Chocolate doesn't exist. These don't necessarily translate into higher demand for a competitor's product, and may in fact deflate the entire industry. tl;dr - pricing is hard, simple supple-demand models don't describe it very well.
jeffdavis 12y ago
Even the most liberal of economists must be thinking: "this sounds like a job for... the market!"
- EliRivers 12y ago
  Economic liberalism is pro free-market. Do you mean the least liberal of economists?
  - jeffdavis 12y ago
    "Liberal," like fairness, means different things to different people. In America, where this forum is based, it means significant government involvement. But I could have been less ambiguous.
    - ScottBurson 12y ago
      Yes, it's quite an unfortunate terminological collision. American "liberals" tend to dismiss the power of the market. This is quite a different attitude than that denoted by "liberal" in the context of economics.
      - guelo 12y ago
        I think it would be more correct to say that American liberals tend to dismiss the power of the market to produce the optimal result across all concerns not just GDP. Markets do a poor job at things like protecting the environment, and egalitarianism. Also, markets in practice tend to obstruct the sharing of information that is needed by theoretically ideal markets. Also, as capital accumulates free markets tend towards forming monopolies.
- venomsnake 12y ago
  Because this is a textbook case where you have good elasticity.
brador 12y ago
This reminds me of the weird hostile takeover of cadburys by kraft where they purchased 90% of the worlds chocolate for delivery (not option, for actual delivery).
- prewett 12y ago
  Do you have a link? It sounds interesting, but I think you might be confusing the Porsche short-squeeze of Volkswagen stock [1]. I'm thinking that if Kraft bought 90% of the world's chocolate, Hershey would also be in trouble. Besides, I would assume that these companies have delivery contracts already in place for several years. According to everything I found, what happened was that Kraft's price was too low and they did not want to be part of Kraft's low-growth conglomerate strategy. Once they discovered Kraft was actually planning on abandoning that strategy, they they polled shareholders about what price they would be willing to accept, and Kraft offered slightly more than that. [2] [1] http://radian.org/notebook/porsche http://radian.org/notebook/porsche [2] http://www.ft.com/intl/cms/s/0/1cb06d30-332f-11e1-a51e-00144feabdc0.html#axzz3JGM9Afip http://www.ft.com/intl/cms/s/0/1cb06d30-332f-11e1-a51e-00144...
  - brador 12y ago
    I tried finding a link. The best I could find was a cocoa shortage in 2009 leading to a price surge, little talk of the cause. I remember the article clearly. The cocoa was for delivery and the trades were done anonymously (as anonymously as possible) and that"s what made the article stand out. Then a few weeks or months later the talk of the kraft purchase. Of course, 90% of the worlds chocolate was most likely for contracts that month and not the full year, which I guess is what's making the article so hard to find!
imaginenore 12y ago
Cocoa price indexes tell a different story: http://i.imgur.com/2WYy1pZ.png http://i.imgur.com/2WYy1pZ.png Symbols: NIB or CHOC
zkhalique 12y ago
Human demand, meet underproduction. So what? This has happened before. Prices go up and people adjust. Life goes on.
mmphosis 12y ago
http://vision.ucsd.edu/~kbranson/stopchocolateslavery/main.html http://vision.ucsd.edu/~kbranson/stopchocolateslavery/main.h...

86 points by r721 12y ago

jimhefferon 12y ago

Can we expect the deployment of US troops?

krapp 12y ago
I wouldn't worry about it. The US doesn't know what actual chocolate is, they won't even notice its absence.
- adventured 12y ago
  Weak attempt at being funny. In fact, just about every grocery store in America has actual chocolate for sale. The US consumes immense amounts of all types.
  - _wmd 12y ago
    That's not actual chocolate, that's cocoa flavored sugar
    - maaku 12y ago
      The joke is that Americans only eat cocoa flavored sugar, such as is produced by the big commercial candy factories here. The GP pointed out that at any American store will sell you fine, refined chocolates, including (by implication)i mports from Europe, Asia, and South America. What was your point?
  - arethuza 12y ago
    Chocolate in the US does rather odd if you are not used to it - apparently this is due to a fondness there for the taste of a small amount of butyric acid in milk chocolate. http://en.wikipedia.org/wiki/Hershey_bar http://en.wikipedia.org/wiki/Hershey_bar
    - zzleeper 12y ago
      First time I tried an american chocolate (hersheys) I literally threw it away, as it smelled like poo. Only later I realized they all do :/ This may be the reason..
      - ScottBurson 12y ago
        I've always disliked Hershey's milk chocolate. I didn't know why either; this must be the reason. We do have some excellent American chocolate, though: http://www.fearlesschocolate.com/ http://www.fearlesschocolate.com/
    - lobster_johnson 12y ago
      Of course, for their part, Europeans -- especially the Dutch, Finns and all of Scandinavia -- are very fond of ammonium chloride, used to make salty liquorice (often called salmiakki), which Americans generally seem to detest. What people grow up with matters a lot to what they find palatable.
  - Al-Khwarizmi 12y ago
    Quite accurate attempt at being funny, I'd say. In fact, of course actual chocolate is available in America, but most of the chocolate consumed there has such a low purity that it wouldn't even be legal to call it chocolate in other countries. In fact, the article itself mentions 10% cocoa content as being typical for milk chocolate. In Europe, the minimum required by law for milk chocolate is 25%. This kind of thing is why I wouldn't like TTIP to be ratified...
    - nly 12y ago
      Quoting[0]: "In the UK, chocolate must contain at least 20% cocoa solids. In the US, on the other hand, cocoa solids need only make up 10%. A Cadbury Dairy Milk bar contains 23% cocoa solids, whereas a Hershey bar contains just 11%." So both pretty close to the minimums. As a Brit, I personally don't like Cadbury Dairy Milk, far too coarse and sweet. When it comes to milk, I prefer the creamier and smoother brands. But then, to me chocolate isn't an everyday or even regular thing at all. When you look at dark chocolate you're looking at anything from 70 to 99%. When you get to about 85%, chocolate becomes a completely different experience. [0] http://news.bbc.co.uk/1/hi/magazine/8414488.stm http://news.bbc.co.uk/1/hi/magazine/8414488.stm
      - masklinn 12y ago
        > When you look at dark chocolate you're looking at anything from 70 to 99%. Not that I disagree qualitatively (quite the opposite), but legally neither the EU nor the FDA have any such category, their highest categories are at 35% cocoa (respectively "chocolate" and "bittersweet chocolate")
        nly 12y ago
        Yeah I should have said "up to" 70 - 99%. The 70% stuff from Lindt is somewhere around my preference level. Funny you should mention 35%... Bournville (famous UK brand, now owned by Cadbury Kraft) is 36%. I still find it far too sweet.
        12y ago
- mkaziz 12y ago
  This. I adore Cadbury's for example, but apparently Hershey's has a right to that brand in the US, and you have to go to an international store and pay an arm and a leg to get a genuine Cadbury chocolate.
  - MrBuddyCasino 12y ago
    Not to rain on your parade, but as someone who grew up near Switzerland, thats where the good stuff comes from. Cadbury is decent though. On a related note, I have always wondered why food quality is so different by region. For example, these are some categories where the good variety is hard to get in other countries: - belgian beer - swiss chocolate - italian mozzarella In this day and age where goods are shipped for almost nothing around the world, why do they still manage to sell inferior products without having a foreign competitor out-competing them with the better product? Is the foods market simply too price sensitive? Barriers to market entry too high?
    - mkaziz 12y ago
      Can you recommend some good brands I could order online?
  - 100timesthis 12y ago
    Not This. Cadbury's is just mud sold as chocolate, I can't even describe how bad it is.
    - yitchelle 12y ago
      But if your choice is limited, Cadbury's is not so bad. When I lived in Australia, the number of chocolate that I choose form is abysmal. There were offerings from Nestle, Cadbury's and some local offerings. The European chocolate like Lindt are quite expensive and are treated as luxury items.
    - mkaziz 12y ago
      I grew up on it ... I like it. :) It's not Lindor Truffle, but it's good, solid chocolate.
weegy 12y ago
They are running out of chocolate, not chicken mcnuggets.

raldi 12y ago

Why not just raise the price?

adventured 12y ago
That's exactly what the market will do. The world isn't going to run out of chocolate, the only thing that might happen is the price goes up, then a lot more cocoa gets planted or less people are able to afford it. Chocolate running out headlines have existed probably as long as newspapers and mass consumer chocolate.
- abhaga 12y ago
  With diseases, world might actually run out of chocolate or at least some varieties of it. Like Panama disease wiped out Gros Michel banana and is now also threatening Cavendish banana. Similarly Frosty Pod Rot seems to be spreading and threatening cocoa plantations.
  - nmcfarl 12y ago
    That would be an interesting article, this one however was kinda pointless, as it appeared to be predicated on prices not rising, with only a tiny call out to frosty pod.
  - grayclhn 12y ago
    That may be true, but it's not mentioned in the article. Is there a good reference if anyone wants to read up on Frosty Pod Rot? edit: apparently it is mentioned in passing. oops.
  - mikeash 12y ago
    If the very existence of chocolate were actually threatened, the resources that will be made available to save it would be almost incomprehensible. People really like the stuff, and there is no real substitute. Bananas aren't that big of a deal for most people, especially if you're looking at going from two popular varieties to one. If the Cavendish gets wiped out too, I'd say that would just be due to people not caring all that much about bananas. I can't imagine the same happening for chocolate.

dghughes 12y ago

I wonder how Ebola will affect production since it's in the region where chocolate is produced. Isn't it weird chocolate native to South America is grown mainly in African countries and coffee native to South American is mainily grown in South America.

RockyMcNuts 12y ago
http://www.bloomberg.com/news/2014-10-22/nestle-says-ebola-in-ivory-coast-would-hurt-cocoa-output.html http://www.bloomberg.com/news/2014-10-22/nestle-says-ebola-i... http://www.pbs.org/newshour/making-sense/cocoa-traders-make-money-ebola-scare/ http://www.pbs.org/newshour/making-sense/cocoa-traders-make-...

matthewmcg 12y ago

Periodically, the big candy makers try to get the FDA to relax the definition of "chocolate" to allow non-cacao fats into the mix. This could signal the beginning of another lobbying effort. See a 2007 proposal here: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/26/AR2007042602824.html http://www.washingtonpost.com/wp-dyn/content/article/2007/04... "Chocolate lovers read that as a direct assault on their palates. That's because the current FDA standard for chocolate says it must contain cacao fat -- a.k.a. cocoa butter -- and this proposal would make it possible to call something chocolate even if it had vegetable oil instead of that defining ingredient. Whoppers malted milk balls, for instance, do not have cocoa butter."

DanBC 12y ago
This was a problem between the UK and the rest of the EU that lasted something like 25 years. http://news.bbc.co.uk/2/hi/europe/764305.stm http://news.bbc.co.uk/2/hi/europe/764305.stm http://news.bbc.co.uk/2/hi/uk_news/678141.stm http://news.bbc.co.uk/2/hi/uk_news/678141.stm I don't have a "golden palette" but I think I can tell the difference. ("Dairy Milk" is gritty; Galaxy is either creamy or greasy (but my prefered cheap choc) and they have different mouthfeel). Michel Cluizel is my prefered expensive chocolate, but that could just be because I like the box. I'm not sure I'd be able to tell the difference between that and other good chocolate if I was doing a blind taste test.
matthewmcg 12y ago
The current definition is here: http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?fr=163.111 http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRS...

grayclhn 12y ago

A more accurate title might be: "world's biggest chocolate-maker tries to prepare customers for higher prices by disingenuously claiming that we will run out of a renewable resource."

huhtenberg 12y ago
Exactly. I distinctly remember how several years ago Mexico manufactured Tequila shortage by claiming that disastrous weather led to a shortage of agave fruit. At least this was a story given by Canadian liquor stores to questions why Tequila prices were hiked by close to 50% almost overnight. I kid you not. They also issued assurances that once this pesky Mexican weather normalizes the prices will go back to normal. You guessed it - they never did.
- fosap 12y ago
  See the HDD "shortage".
  - vertex-four 12y ago
    In that particular case, there was a shortage - it was extremely difficult for even large businesses to get hard drives. The issue was that hard drive manufacturers were (are?) clustered around an area that got flooded.
    - uptown 12y ago
      Or the shortage was caused by the NSA filling their new data-center with as much capacity as it could get its hands on, covertly, and the flood was used as a convenient cover-story for the shortage.
      - Bluestrike2 12y ago
        Maybe the NSA even managed to engineer the flood itself? Yes, that sounds about right.
      - 12y ago

sneak 12y ago

We won't run out of chocolate. The supply is fixed, demand increases, price rises. Demand falls to match available supply. Chocolate will become more expensive. Not really a story...

JshWright 12y ago
How is the supply fixed? It literally grows on trees... The article mentions a few obstacles to increased production, but those certainly aren't insurmountable. Price increases will inevitably result in both decreased demand and increased supply.
- tptacek 12y ago
  Those obstacles could easily be insurmountable at chocolate's current price point, which is the point of the parent comment.
  - JshWright 12y ago
    The GP didn't assume a stable price, they said the price would increase. I think it's very likely a price increase would result in increased supply.
imaginenore 12y ago
Chocolate becomes more expensive, more farmers start farming cocoa beans, prices go down, armchair economists make more wild predictions in the opposite direction.

vosper 12y ago

"Last year, the world ate roughly 70,000 metric tons more cocoa than it produced. By 2020, the two chocolate-makers warn that that number could swell to 1 million metric tons, a more than 14-fold increase; by 2030, they think the deficit could reach 2 million metric tons." How can the world be eating more cocoa than it produces? I can imagine there might be stockpiles, but surely they're gone if we're talking about year-over-year deficits. I think the article means that the demand for chocolate in 2020 could be 1 million metric tons more than supply. So prices will go up, and there will be an economic incentive for suppliers to increase production and for manufacturers to innovate with new products and efficiencies. Seems pretty normal.

fennecfoxen 12y ago
To be pedantic: if you're going to be all Economics about it, you can't say the world demands 2 million metric tons, because demand is a function of price. If the price goes up the quantity actually demanded will go down...
masklinn 12y ago
> for manufacturers to innovate with new products Oh don't worry they're already "innovating", though those filthy stinking regulations get in the way and stops them from innovatively selling cocoa-flavored vegetable oil as chocolate. Damn you, regulations!

SixSigma 12y ago

Mystery trader buys all Europe's cocoa 17 Jul 2010 The purchase was enough to move the entire global cocoa market, sending the price to the highest level since 1977, and triggering rumours and intrigue in the City. It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years. The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth £658 million. http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html http://www.telegraph.co.uk/finance/markets/7895242/Mystery-t...

tedunangst 12y ago
For those of use less familiar with the metric system, what's the conversion rate between Titanics and Olympic swimming pools?
- reubenmorais 12y ago
  ~52.47: http://www.wolframalpha.com/input/?i=volume+of+the+titanic+%2F+volume+of+olympic+swimming+pool http://www.wolframalpha.com/input/?i=volume+of+the+titanic+%...

bane 12y ago

Solution: 1) Raise prices till consumption matches production. 2) Increase production. 3) Don't decrease prices. 4) Profit.

tptacek 12y ago
Doesn't that strategy require a step 3.5, "repeal economics"?
- bane 12y ago
  Why? Increased supply doesn't guarantee lower prices...witness your average gas price up/down movement. Even a whiff of increased usage or decreased production drives prices up within a day. But it takes a global glut to bring them down over a period of years.
  - tptacek 12y ago
    Increased supply facilitates competition which drives prices down. If you artificially inflate prices, you leave room for competitors to seize market share without taking losses.
    - bane 12y ago
      Generally that's true, but there are cases where it isn't. Suppose you increase prices at a rate exceeding that which decreasing supply would demand, in collusion with other suppliers. You use the proceeds to increase wages. Some point in the future, supply increases back to normalized levels, but now the cost of supply has also increased (because you pay people more), so the wholesale prices remain increased. Prices can only drop back to levels of the new cost floor, or the cost floor has to be moved down somehow -- in this case reducing wages. We see a similar effect in oil markets because the cost of oil production has gone up as easy-to-exploit sources have dried up and more expensive sources have had to come on-line to meet demand. Production has actually increased but prices have stayed relatively high. This includes massive new production outside of OPEC cartel control, so even cartel price fixing doesn't account for it. Even more important, in a major market like the U.S., the distribution costs have dropped as a share of wholesale prices as domestic supply has come on-line. Consumers have simply gotten used to the higher prices so there's reduced pressure to lower them competitively in order to ensure sufficient demand to move target inventory volume. There's also other factors than pure supply/demand. Product differentiation can build in higher prices through perceived value (or other factors) in consumer's minds. Suppose over the next 10 years, the U.S. chocolate industry creates a marketing term "Savanna Chocolate" and starts rebranding all products by percentage of "Savanna Chocolate" they contain. "Now with 5% Savanna Chocolate!", supplemented with a marketing campaign to push all products as "Savanna Chocolate". The term is meaningless. However, it allows them to charge a 10% premium on product which helps guarantee higher prices. Because Savanna Chocolate is not a thing, there's nothing to compete against, it's also trademarked. A competitor can't simply start selling their cheaper "6% Savanna Chocolate" competitor because they'll be sued into oblivion, if they wish to use the term, they'll probably just be charged a license fee large enough to ensure price compliance. All they can do is start an information campaign to try to persuade the public that Savanna Chocolate doesn't exist. These don't necessarily translate into higher demand for a competitor's product, and may in fact deflate the entire industry. tl;dr - pricing is hard, simple supple-demand models don't describe it very well.

jeffdavis 12y ago

Even the most liberal of economists must be thinking: "this sounds like a job for... the market!"

EliRivers 12y ago
Economic liberalism is pro free-market. Do you mean the least liberal of economists?
- jeffdavis 12y ago
  "Liberal," like fairness, means different things to different people. In America, where this forum is based, it means significant government involvement. But I could have been less ambiguous.
  - ScottBurson 12y ago
    Yes, it's quite an unfortunate terminological collision. American "liberals" tend to dismiss the power of the market. This is quite a different attitude than that denoted by "liberal" in the context of economics.
    - guelo 12y ago
      I think it would be more correct to say that American liberals tend to dismiss the power of the market to produce the optimal result across all concerns not just GDP. Markets do a poor job at things like protecting the environment, and egalitarianism. Also, markets in practice tend to obstruct the sharing of information that is needed by theoretically ideal markets. Also, as capital accumulates free markets tend towards forming monopolies.
venomsnake 12y ago
Because this is a textbook case where you have good elasticity.

brador 12y ago

This reminds me of the weird hostile takeover of cadburys by kraft where they purchased 90% of the worlds chocolate for delivery (not option, for actual delivery).

prewett 12y ago
Do you have a link? It sounds interesting, but I think you might be confusing the Porsche short-squeeze of Volkswagen stock [1]. I'm thinking that if Kraft bought 90% of the world's chocolate, Hershey would also be in trouble. Besides, I would assume that these companies have delivery contracts already in place for several years. According to everything I found, what happened was that Kraft's price was too low and they did not want to be part of Kraft's low-growth conglomerate strategy. Once they discovered Kraft was actually planning on abandoning that strategy, they they polled shareholders about what price they would be willing to accept, and Kraft offered slightly more than that. [2] [1] http://radian.org/notebook/porsche http://radian.org/notebook/porsche [2] http://www.ft.com/intl/cms/s/0/1cb06d30-332f-11e1-a51e-00144feabdc0.html#axzz3JGM9Afip http://www.ft.com/intl/cms/s/0/1cb06d30-332f-11e1-a51e-00144...
- brador 12y ago
  I tried finding a link. The best I could find was a cocoa shortage in 2009 leading to a price surge, little talk of the cause. I remember the article clearly. The cocoa was for delivery and the trades were done anonymously (as anonymously as possible) and that"s what made the article stand out. Then a few weeks or months later the talk of the kraft purchase. Of course, 90% of the worlds chocolate was most likely for contracts that month and not the full year, which I guess is what's making the article so hard to find!

imaginenore 12y ago

Cocoa price indexes tell a different story: http://i.imgur.com/2WYy1pZ.png http://i.imgur.com/2WYy1pZ.png Symbols: NIB or CHOC

zkhalique 12y ago

Human demand, meet underproduction. So what? This has happened before. Prices go up and people adjust. Life goes on.

mmphosis 12y ago

http://vision.ucsd.edu/~kbranson/stopchocolateslavery/main.html http://vision.ucsd.edu/~kbranson/stopchocolateslavery/main.h...