Climate change is spooking the world’s chocolate makers
But weather data and AI insights can help ensure secure supply chains
Halloween is a huge holiday for chocolate makers. During Halloween week alone, nearly 90 million pounds of chocolate [1] is sold in the United States.
The world’s sweet tooth, however, lasts the whole year, and cravings for the treat are expected to intensify. North America and Western Europe account for more than half of global chocolate sales, but demand for chocolate is growing quickly in emerging markets. Euromonitor International forecasted that by 2019 chocolate sales in Asia would grow by 23 percent and by almost 31 percent in Latin America. [2]
Meeting the global demand for chocolate’s main ingredient, cocoa — which is made from roasted cacao — is a perennial challenge. Cacao trees grow in hot and humid areas, which are also perfect environments for fungal pathogens. Lyndel Meinhardt, head of the USDA-ARS Sustainable Perennial Crops Laboratory, told IBM that when a fungal disease like witches’ broom or frosty pod hits a cacao farm it often causes “major losses”’ — anywhere from 75 to 100 percent of the crop. These diseases, he said, destroy 30 to 40 percent of cacao produced annually.
“It’s amazing that we’re able to produce the amount we can with the fungal diseases that are there,” Meinhardt said.
Climate change will make cacao production even more difficult going forward, the World Cocoa Foundation’s environment director, Ethan Budiansky, told IBM. In West Africa, where two-thirds of the global supply of cacao is produced, rainy seasons will become more sporadic, cacao trees will lose water at a higher rate, and the problem of pests and diseases will escalate.
“You’ll have less production as a whole as a result,” said Budiansky.
Could that mean less chocolate to go around during Halloween season in the future? Quite possibly. But manufacturers, Budiansky said, know that climate change poses “a serious risk to the sustainability of the cocoa sector,” and are already taking steps to ensure that trick-or-treaters won’t go home disappointed in the coming decades.
Researchers are looking to improve cacao’s genetic diversity in order to make crops more resilient to disease. Farmers, Budiansky said, are learning to tailor their agricultural best practices for more turbulent weather. Candy companies, meanwhile, are taking a greater interest in the power of weather data to help generate smarter, more productive farms.
“With better information you might have a better understanding of which pests might be coming through. It might help predict when to plant, when to harvest, when to fertilize,” Budiansky said.
Weather data could also help candy companies better manage their supply chains, said Michael T. Dobbs, an expert in consumer packaged goods and retail in IBM’s Global Center of Competence. By leveraging weather data backed by AI insights, companies could better predict how crops will perform from region to region, and make better decisions about where to fulfill their supply.
“The earlier they know whether they’ll have problems, the better they’ll be able to understand what they want to do from a business perspective,” Dobbs said.
With the right AI tricks, in other words, companies can ensure enough treats for everyone.
Learn more about IBM’s supply chain solutions and see how the ripple effect impacts your business.
[2] https://www.cbsnews.com/news/why-chocolate-prices-are-set-to-rise/
All World Cocoa Foundation images used with permission
