Happy New Year, Soma Crew!
2024 was a big year for our small business. Cacao commodity prices quintupled from June 2023 to December 2024. We have always paid up for high-quality cacao (10-20x commodity market price); all the same, even the cost of our cacao increased by 30–70% last year (for clarity - this is the price we pay for the cacao, not what we charge you).
We tried to cushion this increase with one price increase in 2024 and by introducing higher-margin, predictably priced, non-cacao products (eg our magnificent blenders). We’re doing just fine, and we’re confident our little business will continue to thrive.
Much harder hit have been the big chocolate companies, who had kept prices artificially low for decades (from 1960 to 2020 the cacao price increased 150% from 800usd to 2000usd/tonne; meanwhile, the average house price in Australia leapt 10,000% from $10,000 to $1,000,000).
[We’ve adding an extra paragraph break here to let those numbers sink in].
Big chocolate responded to the commodity price surge by increasing prices, reducing product sizes, and reducing the cacao content of those products (replacing it with all sorts of other nasties).
So far the biggest beneficiaries have been middle-men and commodity traders, but we’re hopeful that as the market settles, some of the money will find its way to farmers. In the Ivory Coast and Ghana, the average cacao farmer earns 50c a day, far below the $1 per day the UN considers poverty wages in those countries. This has created a stagnant and uninnovative industry with poor ecological practices and an abysmal human rights record.
Big chocolate companies have essentially strip-mined the West African jungle.
As cacao farming once again becomes a viable livelihood, we hope that a new generation of farmers with new money will implement new practices to benefit the environment and their communities and produce better-quality cacao.
Hopefully, as prices level out, there will be a consumer shift away from Cadbury and Nestle towards single-origin cacaos and boutique chocolatiers. We’re excited to be part of that shift.
The cacao industry is going through crisis, but we trust the crisis will prove fruitful. For decades an artificial market has exploited farmers and the environment; as that system collapses, we hope that a new and better one springs up in its place. We’re licking our lips (literally) at the thought of trying fine cacaos from Tanzania and Madagascar and The Phillipines. We’re excited to continue forging relationships with small growers around the world, and seeing their farms and communities flourish. We’re more than happy to pay a little extra for the privilege. And we’re hopeful that you will all join us for the ride.
