Chocolate is among the most
popular flavors in the world. It is used almost second to vanilla flavor. As a
result, cocoa powder is a popular ingredient in numerous food products. The
demand for cocoa is expected to increase more in the coming year. The latest
technological advancements and various initiatives by leading players in the
cocoa industry will aid the sector in overcoming existing issues, including low
productivity, deforestation, loss of biodiversity, child labor, and others.
Growing Demand for Chocolates to Boost the Cocoa Market
According to statistics, more
than 40% of the world's cocoa production is used to make chocolates. The
increased demand for chocolates is a primary factor driving up cocoa demand in
the global market. Cocoa-based chocolate contains a number of antioxidants and
minerals. Chocolate is also high in calories, so consuming it in moderation can
help manage the weight of an individual. In addition, organic cocoa has been in
high demand, and this trend is projected to continue in the future years. Food
manufacturers and consumers are becoming progressively aware of the advantages
of organic foods.
Chocolate consumption lowers
cholesterol levels and the risk of cardiovascular disease. Furthermore,
chocolate has been considered a luxury or premium product since ancient times
due to its aroma and flavor. All of the above mentioned health benefits, and
consumer perceptions of chocolate, are predicted to increase demand for cocoa
and, as a result, propelling the global cocoa market's growth. According to
Allied Market Research, the global cocoa market is anticipated to grow at a significant CAGR of
4.3% from 2021 to 2027.
Advance Technologies to Aid the Challenges in the Cocoa Industry
Chocolate production is a
growing industry with massive earnings for large corporations. While these
corporations compete for ever-increasing market shares and profits, countless
cocoa farmers bear the price by receiving a less and smaller amount of the
earnings. Due to local trading arrangements, tariffs, and the quality of the
beans, cocoa farmers usually receive a small portion of the global market price
for beans.
Even after agreements from
the world's finest chocolate-providing companies, such as Hershey's, Nestlé,
and Mars, unfair labor practices and human rights breaches continue to affect
the cocoa sector. Farmers' low and unstable income causes enormous social and
environmental issues. Market players are adopting advanced technologies to
improve transparency in order to deal with the growing labor issues in the
industry. Koa, a Swiss-Ghanaian business, has developed new blockchain
technology that could benefit cocoa farmers.
Koa has partnered with South
Africa’s MTN Group and Germany’s Seedtrace for this blockchain technology. The
company believes that this partnership will allow for safeguarded transparency
across the value chain that records payments to farmers, specifically small
cocoa farmers. The mobile transactions are validated and recorded on a
blockchain and are made public. Rather than allowing a person to enter data on
the blockchain, it directly connects data from mobile monetary transactions.
This combination enables the company to validate increased farmer revenue,
provide complete proof, and improve stakeholder trust.
Another prominent issue in
cocoa farming is deforestation. The Côte d'Ivoire and Ghana together produce
about two-thirds of the world's cocoa supply, and because of this,
deforestation is a big problem in these regions. Between 2002 and 2019, Côte
d'Ivoire and Ghana lost around 25% and 8% of their primary forest area, with
cocoa farming contributing to a large amount of deforestation.
The European Commission
proposed a Deforestation Regulation in November 2021, intending to reduce
Europe's contribution to forest degradation, deforestation, greenhouse gas
emissions, and biodiversity loss. The EU, as the world's largest buyer and
consumer of cocoa, has the power and obligation to influence substantial
changes in the cocoa business through strict supply chain rules.
Leading players are investing
in various technologies to develop a responsible cocoa supply chain. Supply
chain mapping technology is the key strategy adopted by market participants to
keep a check on deforestation and connect with their suppliers to learn more
about where cocoa comes from, how it is produced, and how they can help.
Chocolate businesses use supply chain mapping software to detect all of the
cocoa farmers they buy from and to use satellite photography to monitor and
evaluate those fields for deforestation.
With the continuous
monitoring of satellite imagery and other data, the chocolate companies can
identify if and where they have been at risk of deforestation. The visibility
allows the market participants to also communicate in more constructive
discussion with their suppliers and other major stakeholders in the direct
supply chain. Supply chain mapping technology has the potential to turn the
tide on deforestation by allowing companies to intervene before an issue
arises, as well as ensuring that responsible farming practices are followed on
every farm.
Author’s Bio:
Vaishanavi Kumbalwar
E-mail: vaishanavi.kumbalwar@alliedanalytics.com
LinkedIn: https://www.linkedin.com/in/vaishanavi-kumbalwar
Vaishanavi Kumbalwar is a fun-loving, independent, unconventional and original thinker who loves to put her thoughts into words. She holds a bachelor’s degree in Mechanical Engineering and currently working as Senior Associate Content Writer at Allied Market Research. She thrives on challenges and loves to explore different writing styles to bring off her fondness for being a writer and blogger. She is an enthusiast of different cultures, places and cuisines and loves to travel off the tourist path and explore new things.
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