Cocoa loco: how bakers can make new toppings and fillings despite the choc crisis

Chocolate has been on a wild ride over the past year, with supply challenges causing cocoa prices to skyrocket.

While bakers that stay on the savoury side have ongoing challenges relating to inflation, energy, labour etc to contend with, the majority of sweet treat specialists are facing a real headache trying to create appealing toppings and fillings for their ranges whilst maintaining healthy profit margins.

That’s because chocolate is still the most popular flavour in bakery. “There will always be a place for chocolate,” affirms Jacqui Passmore, marketing lead West EU & AMEAP at bakery supplier Dawn Foods, which suggests cutting it out isn’t an option.

Despite a recent fall, cocoa prices remain alarmingly high – currently around triple that of June 2023 levels.

So, what exactly has happened to the chocolate market, and is there hope of things improving soon? How can bakers adapt recipes in the meantime, or find success with other flavours for toppings and fillings?

History repeating

The cocoa trade has had its ups and downs throughout the ages, with some similar themes being retold.

The Aztecs of Mesoamerica revered cocoa beans and even used them as currency. Its discovery by European explorers saw it become a hot commodity in the West. Around two hundred years ago, the Napoleonic wars in South America decimated cocoa supplies to Europe, with chocolatiers forced to get smart with recipes to deal with soaring prices (more on that later).

Cocoa cultivation was introduced in Europe’s West African colonies around the 1880’s, which proved so successful that by 1930, farmers in the likes of Ghana, Nigeria, Cameroon, and the Ivory Coast accounted for 65% of world production. Adverse weather conditions in these nations caused prices to rise sharply during the 1970s, peaking in July 1977 at over $5,700 per tonne (roughly £23,200 in today’s money), before new supply helped bring about a steady decline.

At the dawn of the 21^st Century, political instability in Africa drove up prices, with more weather-related crop shortages contributing to a high in February 2011. However, it was in the past year that things really heated up to melting point.

Cocoa futures had gradually accelerated upwards in cost, roughly doubling its value by November last year. Then at the start of 2024, prices skyrocketed triggered by – for want of a better phrase – the perfect storm of conditions affecting major growing regions. These included yet more climate hostilities, as well as many cocoa trees suffering from old age and disease, with farmers unable to cope due to financial constraints.

Very late, big purchases by large industry players, who needed to buy futures from funds to extend their cover, were also cited as driving higher prices.

On 19 April 2024, for the first time in history, cocoa topped £10k per tonne on the London Cocoa Futures market. Thankfully, the prices rapidly dropped back down by almost a half within the month that followed but have since reverted to a bullish trend to currently sitting at around £7,600.

How long will it last?

The cocoa market is still in a sticky situation, with no clear indication of when prices will return to those from years prior. However, chocolate suppliers say they are starting to see a bit more optimism in the market.

Steve Calver, commercial director at sweet ingredients supplier Henley Bridge, thinks the next main cocoa crop in West Africa should be better while admitting it is still unlikely to turn the deficit into a surplus because demand is still very high. He adds that the price drop in recent weeks may have been “partly be down to future crop forecasts being more positive but more likely to be speculators selling their positions”.

Concerns over the security of cocoa supply are presently outweighing those over prices at chocolate suppliers, claims Calver. “Normally customers and chocolate suppliers would book forward contracts, but they are very reluctant to do so when the market is so high because they don’t want to be left with high priced stock if the market starts to fall. Therefore, everything is still very short term at the moment which leads to volatility in the market,” he says.

With the issues well publicised by the mainstream media, Calver recommends bakery businesses increase their prices in line with cocoa, assuring that they will not be alone in doing this and it should only be viewed as a temporary measure.

There is no one-size-fits-all solution when it comes to managing supply chains and costs, reminds Puratos UK’s senior marketing manager Lisa Kerr, who advises bakers to leverage the expertise of their chosen suppliers. This will help them access “high-quality, cost-effective solutions and adjust their product formulations based on availability of their inputs, while minimising disruptions or the need to adjust production processes”, adds Kerr.

Barry Callebaut claims it is trying to support its customers by providing market intelligence or R&D resources to help them take the best decisions. “We are a trusted partner to customers in this time of uncertainty and volatility and we are working closely with our clients to navigate this unprecedented situation,” stated the company.

Less is more

One straightforward tactic is to reduce the amount of chocolate in recipes – cutting down on chocolate chip levels from 12% to between 8% and 10%, for example, in cookies and muffins.

Substituting some cocoa content for hazelnut, meanwhile, is one of the oldest tricks in the cookbook. Turin chocolatiers came up with ‘crema gianduia’ (hazelnut chocolate cream) in 1806, back when Napoleon’s armies were causing maximum disruption to the South American supply chain. The recipe was later picked up by Italian food innovator Pietro Ferrero during World War II, leading to his family’s multi-billion-pound Nutella empire.

The flavours of Ferrero’s chocolate bar brand Kinder Bueno, including hazelnut cream and wafer biscuit, have been recently incorporated into Dawn’s new Bueno Delicream filling. On-trend flavour pistachio can also deliver the indulgence of chocolate with an eye-catching green hue.

Changing tastes

Bakers may also succeed in switching chocolate out completely for less expensive flavours. Among the experts’ suggestions for alternatives are two clear frontrunners – caramel and fruit.

Liz Gabriel, bakery specialist at flavour experts I.T.S, calls caramel “the obvious first choice when it comes to indulgent flavours particularly when creating a filling for a muffin or doughnut”. Salted caramel, caramelised biscuit, and even miso caramel can help create additional flavour notes to frostings and that all important ‘mouthfeel’”, she adds.

Kerr at Puratos UK agrees, heralding salted caramel as a firm favourite among sweet-toothed consumers, while recommending adding molasses as an “innovative way to recreate the much-loved sticky toffee pudding taste”.

British Bakels marketing manager Michael Schofield makes it a hattrick of nods to caramel, recognising it as a consumer favourite. He also maintains that the present economic climate has given rise to ‘revenge spending’, whereby consumers are “splurging small on sweet bakery and other affordable treats” that often star caramel.

Fruits of favour

A recent UK consumer research survey by Puratos found 64% of respondents saying they liked a familiar element when trying new types of food and over half (56%) wanting to try new combinations. Sourness topped of the list of most desirable new tastes, meaning NPD teams working on sweet bakery innovation should be considering fruit inclusions.

Schofield at British Bakels details how each fruity flavour can lend itself to a particular mood or requirement. “When people want to feel cheerful, happy, or refreshed, they choose tropical or exotic fruits, coconut, and banana,” he says. “They go for berries, summer fruit, and orchard fruit flavours for health, and citrus flavours like lemon and orange when they want to feel comforted.”

Dawn’s Passmore, meanwhile, highlights a strong demand for “unusual flavour partners” such as yuzu – a flavour on the rise.

Although cocoa prices still remain prohibitive, bakers can still have a think about tapping into demand for chocolate flavour pairings. The Chocolate Flavours report by I.T.S names the most popular pairings as vanilla, caramel, peanut, almond, coconut, strawberry, banana, orange, raspberry, cherry, and mint – Gabriel also urges bakers to be “really brave” by trying combinations like sesame, pink grapefruit, cinnamon, or chilli.

Having experimented with new flavours, bakers can perhaps try adding inclusions that offer new textures to excite consumers beyond the likes of gooey chocolate chips. For example, the Smoobees soft filling pearls from Puratos grant a uniquely soft, melting texture to cakes and muffins but in flavours of strawberry, lemon, blueberry, coffee, or caramel.

With bakery manufacturers hoping for a bittersweet end to the elevated cocoa prices within the next year, there’s still plenty that can be done to toppings and fillings to help make balance sheets that little bit more appetising.