In West Africa, climate change decreases cocoa farming productivity and has shocked the chocolate industry.
In the cocoa industry, the steady and slow onslaught of climate change will compound an already challenging demand/supply equation. As temperatures increase by ~2C through to the year 2050 within the largest cocoa growing countries, including Cote d’Ivoire and Ghana, vast cocoa farmland areas are going to become less productive, according to the International Center for Tropical Agriculture.
The quantity of land in which cocoa optimally grows will consolidate inside fewer spaces at greater altitudes, in which temperatures are going to stay most conducive to the growth of cocoa trees. The Intergovernmental Panel upon Climate Change also contends that these higher temperatures won’t be accompanied by a rise in rainfall. The consequences will include plant starvation and moisture loss. All in all, 90 percent of the locations inside Cote d’Ivoire and Ghana studied by the IPCC are predicted to become less appropriate for growing cocoa, and thereby less productive.
Chocolate candy manufacturers and cocoa processors already are acting to improve the situation with cocoa farming. This is especially so within the West African nations that are key to this industry.
Hershey is dedicated to sourcing 100 percent of its cocoa from sustainable growers by 2020. Sustainable growers, here, refers to farms that are certified by 3rd party institutions to have the greatest international standards for farming, environmental, and labor practices. The move will result in added yearly costs in Hershey’s P&L to the tune of 9-digits, or more than 1 percent of net sales.
In conjunction with that dedication, Hershey invests in modernizing cocoa farming within the area. The modernization strategy involves a number of initiatives, like working with local growers to improve farming methods, offering mobile phones to growers as a source of real-time data, as well as planting more cocoa trees.
For a budget-driven and publicly-held company such as Hershey, the idea of heavily investing in a project without any related revenue growth is as unappealing as they come. Hershey will have to face the challenge of climate change at some point though, whether with investments now or greater cocoa prices later.
For more information on the challenges cacao farmers face with climate change, contact Kakosi Chocolate at 617-335-6475.