How Does Cocoa Price Affect The Global Chocolates Industry And What Strategy Should Be Adapted To Minimize Adverse Effects? (2013)

How Does Cocoa Price Affect The Global Chocolates Industry – This dissertation discusses the effects of soaring cocoa prices as a source of dynamic changes in the chocolate industry. Without cocoa there can be no chocolate. In this project we analyse various aspects of cocoa market and it’s interconnection with cocoa farming, farmers and industries depended on cocoa products. The current scenario brings bad news for confectioneries as they are facing severe supply chain problems in acquiring cocoa beans. Increased demand from growing economies of China and India has opened new consumer market for top notch chocolate confectioneries.

Therefore, it is imperative for the chocolate manufacturers across the world to ensure a sustainable supply chain of cocoa to carry on the conversion of fine cocoa beans into mouthwatering bits of chocolate treats and bars. Lately the chocolate industry is experiencing many problems in terms of cocoa bean production and its availability owing to lower production from the West Africa. The cocoa shortage problems that is the talk of the town lately has not appeared overnight but is a result of various technological and structural changes that took place in the developing agricultural over the past three decades.

The main significance of the study is to draw inferences regarding the effect of cocoa prices on chocolate manufacturers and the entire chocolate industry. Therefore, this study serves the purpose of providing an overview of all the factors pertaining to the worldwide shooting prices of cocoa. The aims and objectives of this work include critical evaluation of major factors affecting the price system of cocoa across by analysing prevailing problems in the acquisition and the hurdles in the supply chain of cocoa.

The literature review discusses the past and current cocoa production scenarios in major cocoa producing countries (Nigeria and Ivory Coast) Political unrest Ivory Coast has proved to be an important source for sending cocoa prices spiraling in upward direction. This study is based on qualitative approach based on credible secondary sources from various published journals, print media, online web journals and electronic reprints. Moreover, the reaction of multi-billion chocolate manufacturers and processors in response to increasing price of cocoa cover a major part in this study. This study suggests critical evaluation of the following objectives:

• To critically evaluate the factors affecting the price system of cocoa across the world by reviewing various scenarios that point out the prevailing problems in the acquisition of cocoa and the hurdles in the supply chain.
• To thoroughly examines the underlying reasons behind the increase of prices since the last few decades.
• To determine the key players and critically evaluate their role in direct or indirect influence on the chocolate industry and how the price volatility of cocoa affect chocolate manufacturing firms on an international level?
• To deduce a conclusion regarding the strategic policies and suggest other measures that should be taken by the industry to overcome the issues regarding the inconsistency of the cocoa supply chain.

• 10,000 words – 38 pages in length
• Good use of literature
• Good analysis of subject area
• Well written throughout
• Ideal for economics students

1: Introduction
Background of the study
Significance of the study
Statement of Problem
Aims and Objectives
Research Question
Scope and Limitations

2: Literature Review

3: Research Methodology
Research Methods

4: Findings and Analysis
Increasing Prices of Chocolate Bars and Treats
Reducing the Costs by bulking out Chocolate Bars
Shifting to Premium Products
Cutting Product Size to Reduce Costs
Turning towards Uncertified Cocoa Beans
Incorporating Structural Changes
Formation of Certification Schemes
Adopting philanthropy in Business
Investing Heavily in Research and Development

5: Conclusion and Recommendations
Getting to the Core of the Problem
Formation of efficient Communication Network
Relationship Driven Cost Management Techniques
Bargaining and Negotiation between Trading Parties
Formation of Strategic Alliances and Government Intercession
Investment for Rehabilitation and Plantation of Certified Cocoa Farms
Attract Youth to Farming
Investment in Research and Development
Improving infrastructure of Educational institutes and Health Centers

Bibliography