The commodity alternatives industry is spinning up serious growth, driven by crises in cocoa, coffee and even citrus as ingredients majors respond to mounting shortage concerns.
Big focus has been given to cocoa, which has more recently suffered crop shortages due to ongoing adverse weather events. This has led to prices surging to near 400% in the last year.
“Cocoa production is struggling for two reasons,” says Kerry Group’s VP of strategy & marketing – taste, Leigh Anne Vaughan. “There are extreme weather conditions, but there’s also what’s called swollen shoot disease, which is a disease in the cocoa plant. That means global stocks are down.”
Cocoa stocks slumped 26% from 2023 to 2024 and are continuing to decline, leading to all-time high prices, she explains. A whole range of alternatives have grown as a result, but Vaughan believes this is only the beginning.
Upcoming European Union Deforestation Regulation (EUDR) changes will add further pressure on the sector as supply chains are reassessed, experts have warned.
The future of cocoa pricing
As uncertainty around future pricing and supply continues, manufacturers from confectionery to bakery and beverages increasingly demand alternatives.
Within this, Kerry Group has developed products that extract a higher flavour density from stressed resources, such as cocoa, coffee and orange, to help makers reduce raw material inputs.
When manufacturers are adjusting recipes to account for alternative ingredients, they’re also likely to go further, claims Vaughan.
“Manufacturers are actually starting to look more broadly at their whole recipe, because while consumers are concerned with rising prices, they’re also concerned with the nutritional quality of their food,” explains Vaughan.
Some of Kerry Group’s solutions can cut out between 50% and 80% of a standard raw ingredient from recipes, with cocoa and coffee on the lower side of the scale and citrus at the upper end, she says.
Other commodities in crisis
Little-to-no let up on commodity stresses is expected and even supply of basic crops like garlic are beginning to face struggles due to changing weather.
Kerry Group, along with its competitors, has spotted an opportunity to bolster business opportunities within the ingredient alternative space, because “we’re only just scratching the surface”, says Vaughan.
In the coming months, the business will launch a new platform and strategy that taps into the growing need for commodity alternatives.
The ‘taste with impact’ platform will respond to manufacturers’ stresses around cost, supply mitigation and/or sustainability, explains Vaughan.
“We’re also working on a biodiversity plan, both in terms of how we can help manufacturers reduce the cocoa they’re using, but also our own sourcing and long-term plans.”
