Cool Beans. Hot Commodity.
June 13th, 2008
Chocolate and cocoa are commodities that are widely traded, but in actuality are controlled by a handful of companies. There are probably about a half dozen significant chocolate manufacturing companies in the world. We work with several different ones, since each has different products that we prefer to use in different formulations. These companies are all huge multinational companies, and one often gets the sense that they are all working together as a cocoa cartel.
Over the past two years, prices have increased significantly. Part of that can be attributed to the rise in the commodity price of cocoa. One of the ironies in the increase of that price is that most of it isn’t attributable to companies buying chocolate. Instead, it comes from financial speculators, hedge fund managers, and investors trying to make money in the futures markets. But for those of us who actually need the products and want to maintain a level of quality, it has forced about a 25 percent price increase!
The commodities market is an interesting place. Hard to believe that a hedge fund directly affects the cost of your mocha.
Chocolatier Michael Szyliowicz is an innovator who crafts quality syrups in his Denver lab. Michael's adventurous spirit takes him around the globe in search of trends and best practices. He shares his musings, observations and experiences.
