Asia

The Times     March 11, 2006

For lovers of chocolate, future could be very dark
From Richard Lloyd Parry in Tokyo
GLIMPSED through its smoked glass windows, with its dim lighting and its watchful guards, the Cave du Chocolat in Isetan department store looks more like the premises of an exclusive jeweller than an upmarket sweetie shop.

Inside, beautifully turned out Tokyo ladies hover over chocolates from Switzerland, Belgium, France and Spain that glisten like brown gold.

The standard price is 300 yen (£1.50) for a single piece; the most expensive chocolates, containing foie gras, sell for 1,000 yen each. Prices such as these do not seem to blunt the appetite of Japanese shoppers, the most fanatical chocoholics outside Europe and America.

But now a shadow is looming over the worldwide chocolate industry -- the threat of a worldwide shortage of cocoa beans, caused by a sudden epidemic of chocomania in Asia.

With chocolate consumption increasing at a rate of 25 per cent a year in the Asia-Pacific region, and 30 per cent in China, chocolate makers fear that coco- bean growers will not be able to keep up with demand. The unstoppable growth of China has aroused fears of future conflicts over natural resources such as oil, gas and water. Now a new and unforeseen catastrophe presents itself: global chocolate wars.

"It always seems to be the same with China," says Yoshiko Ishihara, a 56-year-old housewife, who emerges from Isetan bearing a jar of deluxe chocolate spread for her husband. "They consume so much. Fish and oil are becoming scarce. But it's hard to believe that one day I won't be able to eat chocolate."

The first chocolate in Japan was brought by Dutch sailors who gave it to prostitutes in Nagasaki in 1797. A century later the Morinaga confectionery company was selling chocolate at prices that few but foreigners could afford. By 2004, the average Japanese was eating 2.2kg (5lb) a year.

Compared with the British (9.2kg a year) or the world leaders, the Swiss (11.3kg a year), the Japanese have a long way to go. Annual consumption in China is smaller still at 50g a year, but its population of 1.3 billion, and its rapidly expanding urban middle class, make it the market of the future.

"Chocolate is still very expensive for Chinese," says Fumio Sukegawa, of the Chocolate and Cocoa Association of Japan. "But even just 1 per cent of China is 13 million people, which is about the size of Tokyo. That's why chocolate producers are concerned."

Already chocolatiers are being paid the ultimate compliment in China -- fake versions of their most famous brands. In January, Ferrero Rocher successfully sued a Chinese confectioner that had been producing rip-offs.

Cocoa beans grow in a narrow equatorial strip from South America through Africa to Malaysia. It takes five years for a tree to mature, which makes it difficult for growers to react quickly to spikes in demand.

Japan's peak chocolate season is Valentine's Day, when women give chocolate to boyfriends, husbands and male colleagues. But the confectioners have also been shrewd enough to establish a second sweetie festival next Tuesday, White Day, when men reciprocate with white chocolate, white cakes or white marshmallows.

The future of chocolate all depends on one thing -- the degree to which the Chinese reject their traditional sweets. In Japan, chocolate is still outsold by wagashi, sweets made out of rice, beans and sesame.

I will look at adding this commodity to my portfolio, i need to finance my chocolate consumption ;-).