KALONA

When you hear the words, “Cocoa futures are on a record-breaking rally,” you might think, “Wow, way to go, cocoa.” If you were a marathon runner, the idea of rallying and breaking records would strike you as very good things. They are the equivalent of winning.

Lyndon Hershberger is not a marathon runner, however. He is a chocolatier; his fate is closely tied to that of the cocoa crop. And when the cocoa market rallies and sets records, his brain flashes “warning: danger ahead” signals. If his customers walk into Kalona Chocolates and see record high prices on turtles and truffles, they might just make a U-turn and leave empty handed. That’s not winning, that’s losing.

This is not a moment in which Hershberger, 58, wants to lose. Closing in on retirement within a decade, he aims to make Kalona Chocolates as attractive a business as possible so a new owner, whether family member or not, will see a beautiful future in it. A future in which cocoa costs a fortune is not ideal.

Although cocoa is the cornerstone ingredient for a chocolates business, it is hardly the only one. Other ingredients in the confections at Kalona Chocolates include a variety of nuts, peanut butter, coffee beans, cream, salt and sugar. And of course there are other input costs. Things like labor, packaging and overhead. That is why cocoa futures can jump from $2,600 a ton in April 2023 to just over $10,000 a ton by March 2024 – almost quadruple – and Hershberger’s chocolate almond clusters don’t experience a corresponding price increase.

Which is not to say that Hershberger won’t eventually have to raise his prices.

Cocoa crop in peril

Humans generally crave chocolate; a compound within it, phenylethylamine, releases endorphins in our bodies when it melts in our mouths, making us feel happy, satisfied, and blissful, like falling in love. As a result, our demand for it is unabating.

Yet the cocoa bean supply has declined considerably in recent years.

60% of the world’s cocoa comes from the West African countries Ivory Coast and Ghana. For the last three years, cacao harvests have been poor, thanks to challenging weather patterns and bean diseases.

Most recently, extremely wet conditions in late 2023 drove an outbreak of black pod disease, a fungus that can destroy an entire harvest.

Then it became very dry, helping mealybugs spread swollen shoot virus, which can reduce bean yields by 50% in the second year. As there is no effective treatment yet, infected trees must simply be removed; even then, the disease may not be completely eradicated.

As a result, the global cacao harvest could fall another 10% in 2024, which compounds the losses suffered in the previous two years.

West African farmers face other challenges on top of weather and disease; their trees are aging and less productive. The roads are substandard and make transporting their crop to port difficult. And their incomes fall below the international poverty line – they receive a fixed price for their beans, regardless of the market – making it tempting for them to transition their land from cacao growing to illegal gold mining.

Reaction to scarcity

Hershberger’s response to this situation is the same as that of global chocolate companies: buy and store as much chocolate as he can and hope to weather the crisis.

When Hershberger’s chocolate distributor saw price increases on the horizon this spring, they offered him the opportunity to purchase as much as he wanted at the current price if he acted immediately. He took them up on their offer and put away some 3,600 pounds of chocolate in his storeroom, about four times the 900 pounds he would typically stock at this time of year.

He hopes the stacks of 10-pound bars and mountains of wafers will last until fall. Then he anticipates raising his retail prices 10-15%.

Given his commitment to quality products, Hershberger has no intention of substituting lesser ingredients for the premium chocolate his customers have come to value and count on.

The future of chocolate

It’s hard to imagine accepting a gradual then sudden end to chocolate. When faced with such a prospect, we tend to turn to our trusted friend, Science, to prevent this outcome. Isn’t there some kind of work-around?

Phylloxera wiped out European vineyards in the 1860’s, but they still grow grapes today; the vines were grafted onto resistant American roots, and European winemaking was saved. If that could be done over 150 years ago, surely we can pull off something similar today. We have genetic engineering. We have food science.

National Geographic contemplated this in a 2015 story, “Can GMOs Save Chocolate?” At that time, the authors foresaw a chocolate shortage in the next five years “due to climate change, disease and an increased demand for chocolate around the globe,” exactly what is occurring now.

The story outlined the challenges of growing cacao: it only produces beans when grown near the equator. New trees take up to five years to produce fruit, and it takes up to 10 years to know if the cacao tastes good.

For example, a type of cacao called CCN-51 was developed that proved to be disease resistant and produced plentiful beans – but it tasted like “acidic dirt.” Even so, boosted with extra sugar and flavoring, it will likely be used in lower quality chocolates.

That’s not a great solution for master chocolatiers, however; just like winemakers, they “spend time and effort picking just the right mix of flavors, from cashew to raisin to cherry,” the Nat Geo story explains.

Thus, genetic engineering might be the best direction to go when it comes to growing hardy, delicious cacao; however, “Researchers say that creating the perfect chocolate is not going to be easy. Chocolate is a very complex food, containing 600 different elements that make up its overall flavor. Developing a GMO cacao plant that is both healthy and flavorful will be very difficult,” the story concludes.

So what about food science? Can’t we fake chocolate?

The answer to that question is yes. Products imitating chocolate are being grown in petri dishes at a Silicon Valley startup and 3-D printed at the University of Amsterdam.

In the former case, individual cacao plant cells are fed nutrients, then fermented, roasted, and ground into “chocolate.” In the latter, food scientists are working to print edible non-food metamaterials -- materials with structures and properties not found in nature -- that offer an experience for the mouth like real chocolate.

Or we could do the harder things. Countries like Ecuador, Peru and Brazil might get serious about cacao farming and thus diversify the places in which cacao is grown. Diseases like black pod and swollen shoot are not prevalent in South America the way they are in West Africa, so this might give the global market more stability.

In addition, governments in Ghana and Ivory Coast could lift the fixed prices paid to farmers and increase their incomes so that they are able to do more to protect their cops.

Kalona Chocolates

None of these solutions are ones that Hershberger can implement himself; he can only hope experts in these areas will find ways promote healthy cocoa bean harvests so that he can afford to purchase chocolate for his business.

In the meantime, he appreciates the community that supports Kalona Chocolates by buying boxes of cherry cordials and caramels to celebrate special occasions and to give as gifts.

Kalona Chocolates is located at 211 5th Street, downtown Kalona. The shop is open 10 a.m. to 4 p.m. Monday -Saturday. Be sure to stop by during the special Mother’s Day Farmers Market in Kalona on Saturday, May 11; cardmaking will be available for kids, in addition to plenty of beautiful chocolates.