In March 2022, impact investor Blue Horizon announced its investment in California Cultured, a company that grows chocolate from cocoa stem cells as opposed to traditionally farmed cocoa. This investment follows similar moves to transform food production in other industries, such as meatless meat and coffee. As climate change impacts cocoa crops and chocolate producers face pressure to address ESG issues in traditional farming, companies like California Cultured see a bright future for sustainable food production, and so do investors.
Cell-Based Food Industry Sees Growth
Blue Horizon is not the only strategic investor interested in California Cultured. Cult Food Science also added the company to its cell-based food portfolio, as did Japanese chocolate company Meiji and Agronomics.
Such investments indicate a growing interest in the $1 billion cell-based agricultural sector, with one 2021 study showing that cell-cultivated meat could make up about 40% of future meat intake. As a result, a variety of food tech companies worldwide are developing cell-based production methods to create sustainable alternatives to traditionally produced food and derivative products.
Other companies delving into cellular agriculture and sustainable food production include:
VitroLabs: Creates lab-grown leather “that’s simply more humane and more sustainable”
- BlueNalu: Grows whole-muscle, cell-based seafood
Wilk: Develops both animal and human milk cultured from mammary cells, for a 100% farm-free product
- Aleph Farms: Debuted the world’s first cell-based steak in 2018 and continues to develop “a new way to steak.”
Cellular agriculture aims to circumvent or eliminate child slavery, deforestation, and climate change by growing cocoa cells in a lab
Sustainability Issues Persist in the Chocolate Industry
Four countries—Côte d’Ivoire, Ghana, Nigeria, and Cameroon—produce around three-quarters of the world’s cocoa supply, about 95% from smallholder farmers. Cocoa farmers tend to be poor, receiving only 7% of end profits. Furthermore, child labor and even slavery remains a long-standing issue in the cocoa industry, often with major suppliers like Cadbury.
Deforestation and climate change also threaten the sustainability of the cocoa industry in these countries. Côte d’Ivoire—the largest cocoa exporter at 2.2 million tons every year— lost 80% of its biodiversity-rich forests in the past half century, while higher temperatures and drought affect crop viability. The governments of Côte d’Ivoire and Ghana and 35 leading cocoa and chocolate companies formed the Cocoa & Forests Initiative to end deforestation and restore forest areas.
Cellular agriculture aims to circumvent or eliminate many of these issues by growing cocoa cells in a laboratory. These cells are then harvested, fermented, roasted for flavor, and turned into a variety of cocoa products. While research on the climate impact of cellular agriculture in the chocolate industry is scant, a 2021 report on meat found that cellular agriculture benefits the planet by reducing:
- global warming by 92%
- land use by 95%
- water use by 78%
ESG Issues to Address in Chocolate Production
Decades after the chocolate industry made voluntary commitments to end child slavery in supply chains, scrutiny for unethical production practices persists. Increasing demands for sustainable food production and corporate action against climate change also have manufacturers considering their sustainability plans more closely.
According to a 2020 report, the future of the chocolate industry may depend on manufacturers identifying all their suppliers and tracing the source of their commodities to better understand the environmental and human rights risks associated with their supply chain. Over half of companies surveyed aimed to achieve traceability of deforestation or human rights abuses at the individual farm level. Once identified, the report encourages corporate engagement with smallholder producers who often need additional financial or technical resources to comply with corporate commitments.