Innovation & Technology Supply Chain

Can We Cultivate Sustainable Supply Chains for Chocolate?

While some think ethical, climate-resilient chocolate means no cacao, startups such as California Cultured are giving the crop a sustainable makeover in a lab.

By Nithin Coca | Published 1 week ago | About a 5 minute read

Image: California Cultured

It’s no secret that chocolate, arguably the world’s most popular sweet, has a dark side.

Approximately 70 percent of cacao comes from just three countries — Indonesia, and Ghana and Cote D’Ivoire in West Africa — with most of the remainder grown in Latin America and the Caribbean. Regardless of region, conventional cultivation of this lucrative crop has created increasing challenges for brands on several fronts:

Since the early 2000s, revelations about the prevalence of child and forced labor on cacao farms — driven primarily by low prices paid to farmers — have created challenges for brands. In West Africa alone, an estimated 1.5 million children were working on smallholder cacao plantations.
Conventional practices for harvesting and drying cacao have recently been linked to high levels of heavy metals including lead and cadmium in chocolate brands around the world, regardless of quality.
Increasing droughts, heatwaves and flooding in cacao-growing regions have damaged crops and caused chocolate prices to spike as much as 400 percent in recent years — leading to projections that soon, farmers won’t be able to produce enough cacao to meet consumer demand.

With chocolate companies raking in roughly $130 billion in global retail sales in 2024, the industry is deeply invested in finding a way to continue satisfying the world’s sweet tooth well into the future.

Climate-proofing chocolate

While there have been a few promising discoveries that could eventually help increase the climate resilience of cacao crops, more and more innovators are looking to achieve this by taking cacao out of the equation — fermenting everything from fava beans and sunflower seeds to barley and carob to concoct more sustainable, cacao-free “chocolate.” Another growing number of startups — including Davis-based California Cultured — is cultivating more sustainable, contaminant-free alternatives in a lab from cacao cells.

As CEO Alan Perlstein told Sustainable Brands®, “Child slavery has gotten worse, not better, over the last 20 years; moreover, extreme weather is resulting in significant climate effects that are devastating cacao yields. What we're trying to do is create this platform to grow these tropical ingredients in a more sustainable and efficient way that saves on power, equipment and capex costs.”

To Perlstein, the current system of growing and transporting cacao around the world to make into chocolate is unsustainable from a social, climate and financial perspective — both for farmers and brands alike:

Climate change is likely to only get worse, which means less predictable — and potentially lower-quality — cacao production, which stands to hit brands right in the profits.
Consistent global popularity of chocolate and other cacao products has failed to improve farmer livelihoods, and Fair Trade and other sustainable certifications lack the consistency and scale to have the necessary impact.
Brands are under increasing pressure from both consumers and regulators to ensure their chocolate products don’t cause social or environmental harm.

Industry support

One key difference between lab-made cacao and cultivated alternatives to other foods linked to unsustainable practices — including meat, dairy and palm oil? As opposed to the pushback innovators in the alternative-protein space face as the meat industry spreads fears about nutrition and lobbies for stricter labeling regulations and outright bans, “Big Chocolate” is on board with what companies such as California Cultured are trying to do.

“We've been feeling a huge pull,” Perlstein says. “Everyone just wants this as quick as possible. And that means the industry is worried about the supply and quality of chocolate and wants to be on the cutting edge of innovation.”

But not everyone is sold on the sustainability credentials of lab-grown food alternatives — with critics expressing concern about production emissions. Furthermore, a shift to cultured alternatives could further endanger smallholder livelihoods — and it could take away from the real work non-profits and brands have done to prove that sustainable supply chains are possible.

Perlstein feels local production will always be better than long, complex, difficult-to-trace supply chains.

“I believe the future of many of the foods that we're going to eat will, hopefully, be produced more locally — with not only better environmental practices but labor practices, as well,” he says.

Poised to scale

California Cultured hopes to receive a green light from the FDA that would clear the path towards selling its cacao to US chocolate lovers within a year. In the meantime, a recent partnership with Meiji — one of Japan’s largest chocolate producers — means its cultivated cacao powder could be on Japanese shelves as soon as next year.

But the challenge facing all players in the alternative commodity space is how to scale while ensuring consistent quality and reducing costs. The failure to do so is one reason that plant-based meat has seen sales stagnate and fall in recent years. But for cacao, the reality of climate change is increasing the urgent need for viable alternatives.

“There are more diseases than ever before, and the climate is just making it exponentially worse,” Perlstein asserted. “That's why we're spending so much time and effort trying to develop a new supply chain for one of the world's most favorite foods.”

Nithin Coca

Media, Campaign and Research Consultant

Nithin is a freelance writer who focuses on global economic, and environmental issues with an aim at building channels of communication and collaboration around common challenges.

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