You may have seen all the recent press coverage about Penguin and Club biscuits now being described as having 'chocolate flavour' coatings rather than chocolate. Co-founder Claire here to explain why this is happening. I have also recently posted about this on our Instagram feed (chococochocolates) if you would rather watch me talking about this, complete with props to hopefully help bring it to life.
What counts as chocolate
In summary, to be able to describe a product as 'milk chocolate' it must contain a minimum of 20% cocoa solids here in the UK. Sadly, these aforementioned biscuits, and other similar products, now contain even less than that. Britain's biggest milk chocolate brand contains just 20%, so is bang on the legal minimum, versus our milk chocolate which contains 47% cocoa solids, more than double.
By the way, there are three main ingredients in milk chocolate. Cocoa, comprised of cocoa butter (the fat part of the bean which gives chocolate its melting properties) and cocoa powder (which gives the flavour), described as 'cocoa solids' on the packaging. Milk powder, described as 'milk solids'. And the balance, there or thereabouts, is sugar. So it's a pretty straight swap: the less cocoa, the more sugar will be in the chocolate.
By contrast, our signature single origin milk chocolate, made with sustainable Colombian cocoa, contains only 30% added sugar, the same as a bar of 70% dark chocolate, which is quite different to many other milk chocolate brands which contain 50% or more.
Why big brands are switching
So why are big brands reducing the percentage of cocoa so much that it can only be described as 'chocolate flavour', and replacing some of the cocoa butter with cheaper vegetable fats including palm oil, known as CBEs (cocoa butter equivalents)?
It's thanks to the recent steep rise in the price of cocoa, driven primarily by a series of poor harvests in West Africa, which accounts for 70% of world cocoa production. Of that, just two countries account for 60%: Ivory Coast and Ghana. So if these countries have a poor harvest reducing overall supply, the price will rocket, and it has.
Why the harvests have been so poor
This is a problem that has been years in the making, which climate change has accelerated. To be frank, the traditional cocoa model is pretty broken. There are millions of cocoa farmers in West Africa with small farms of less than 5 hectares, supplying thousands of middlemen who funnel the cocoa down to several multinationals, called 'Big Chocolate': the likes of Mars, Nestlé, Mondelez, Hershey, Lindt and Ferrero.
The basic problem is that cocoa farmers are not earning a living wage for their cocoa, the price of which has for years been hovering around $3,000 a tonne. By the way, the average amount of cocoa a farmer in Ghana grows each year is, yes you have guessed it, 1 tonne.
To make the problem even worse, in Ivory Coast and Ghana they don't even get paid the market price. They only get a 'farmgate' price, which is set by their government-run cocoa boards much lower than the market price. Before the cocoa price shock, the farmgate price in Ghana was only $1,400 per tonne. Since then the farmgate price has been increased, but not to match higher market prices, so they are not benefitting from the rise in the global commodity price either.
So it's not surprising that they can't afford to employ people, that children work on farms rather than going to school, that they haven't been able to invest in new trees, and that as their existing tree stock gets older, yields decline and disease risk increases. When you then overlay climate change on top, accelerating the change to previously regular wet and dry seasons, you have a perfect storm resulting in poor harvests and rising prices.
The commodity cocoa price peaked last December at over $12,000 a tonne and has settled back to around $6,000 currently, though it is volatile. But the farmgate price is only $3,000, and I have seen worrying reports about the government cocoa boards threatening to reduce the farmgate price back down again. That is so wrong.
How to spot it on the shelf
When looking at chocolate products on the shelf, just turn the pack around to look at the ingredients. If the chocolate contains vegetable fats as well as cocoa butter, they have to state which are used and also state at the bottom of the ingredients list 'Contains vegetable fats in addition to cocoa butter'. That is a sign that the producer has cut costs, swapped out some of the cocoa butter for CBEs, and you can also be pretty sure that it will contain a high percentage of sugar as well. Sugar is cheap and sugar is addictive.
Overall, we all have to stop thinking of chocolate as a cheap, always-available commodity. It is going to become increasingly precious over time as climate change impacts historically stable weather patterns, and unless African farmers are paid a living wage they won't be able to invest in their farms. Worse, even more young farmers than currently will not want to grow cocoa at all. Ensuring sufficient supply will be a constant challenge to meet demand.
How we do it differently
Our trading model is quite different to this traditional model. We work directly with our chocolate partners producing chocolate for us in their countries of origin in Colombia, Ecuador and Madagascar. They have a long term vested interest in ensuring the sustainability of growing cocoa in their countries, and by making couverture for us to work with they are keeping more of the value chain in their local economies, so much better for their economies than exporting dried cocoa beans, even fairtrade cocoa. And the cocoa farmers are paid the market rate, with no government cocoa board interference.
