Saturday, April 2, 2011
Supply woes, high prices changing chocolate treats
The symptoms are high prices and supply woes but the cause are organizational management challenges. The short term tactics used by the producers to compensate for the high cost of cocoa are meant to buffer the consumer from the volatility and high cost of the commodity. The solution however lies in addressing the global challenges and pressures such as political unrest, futures contract pricing, increasing global demand, stagnant yields, land cost, shortage of future farmers, government policies or lack thereof and even international infrastructure to name a few. Opportunity is also affected by the global nature of this industry, for example: the frustration of coordinating multi-national organization and cooperation to increase yield is a challenge with tremendous potential for profit. Even chocolate can benefit from international organizational attention.
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Greg, this was a good article and it was really surprising to me. I had no idea that chocolate prices had been rising and especially not that they had hit a 32 year high, that's crazy.
ReplyDeleteI like that they at least have some kind of plans in place to help combat the crisis. It seems like a lot of time and resources have been put into researching ways to create higher yields on the farms that already exist. However, if less people continue to farm then they have plans to expand their chocolate treats that have non-chocolate centers.
Overall I think this was a pretty interesting article and it's something that I'll keep my eye on for the next few years.
The situation in Ivory Coast is fluid and dangerous, but not unique in Western Africa. The political climate in this part of the world is very unstable as the countries of Western Africa struggle to industrialize and shed their colonial history. The general lack of education, high levels of poverty and government corruption continue to hinder these efforts. It is unfortunate that the people of Ivory Coast cannot reap the benefits from cocoa exports, because of poor government representation. In a perfect world, the Ivory Coast government would leverage the demand for cocoa beans. This would expand their domestic cocoa production and increase global investment in Ivory Coast. This would ultimately improve the living conditions and life expectancy for the people of Ivory Coast. Unfortunately, I do not foresee a change in the political climate in the near future or a reasonably priced good piece of chocolate.
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