Illustrative case · Sustainability & commercial impact
When sustainability pressures on ingredients put a biscuit business under pressure.
Vulnerable cocoa supply, rising ingredient costs and the need for fair farmer returns create a commercial challenge: how to protect margins without making everyday treats less affordable.
The commercial opportunity: rethink the product range and sourcing together to give shoppers a compelling offer and the business a more resilient basis for growth.
A real market challenge. Adapted to protect confidentiality.
Explore the exampleThe challenge
Cocoa costs rise. Product margins come under pressure.
How can the range remain profitable without losing shoppers?
In this case, higher cocoa purchase prices increase the cost of goods for chocolate-coated biscuits. At unchanged selling prices, gross profit per pack falls. Passing the increase through to shelf prices risks losing shoppers. Smaller packs or recipe changes could weaken value or taste.
This is also a sourcing question. Weather and agricultural risks affect cocoa supply alongside other market forces. The response needs to consider ingredient resilience and fair farmer returns, not simply push purchasing prices down.
The approach
Protect what shoppers love.
Develop another reason to buy.
We would work with commercial, product and sourcing teams on two complementary routes: protect the products where chocolate is central, and develop a biscuit proposition where baking, texture and flavour deliver more of the enjoyment. A crisp biscuit with a lighter chocolate finish could be one concept to test, not a predetermined answer.
Taste and choice tests would compare it with the existing range and competitors at realistic pack sizes and prices. The commercial model would include ingredients, production, trade terms and sales displaced from the existing range. Alongside this, sourcing specialists would examine traceability, purchasing commitments and the prices farmers actually receive.
the core
the offer
sourcing
Product, price and sourcing. Tested together.
The potential outcome
A more resilient range.
With a credible reason to win.
The intended output: a tested product proposition, a recommendation for the range and pricing, a sourcing brief and a costed market pilot. The retailer story would explain who buys, why the offer adds to the category and how the economics work.
The manufacturer could build on its baking expertise, existing production capabilities and retail relationships. The opportunity is profitable additional demand with less dependence on cocoa, not a cheaper imitation. Fairer farmer returns would need an explicit sourcing arrangement and evidence; product savings would not automatically fund them.
- 01ShoppersEnjoyment and value at an acceptable price
- 02RetailersCategory sales, margin and a reason to stock it
- 03The manufacturerProfitable demand and lower ingredient exposure
- 04Cocoa farmersPurchasing terms and evidence of prices received
Behind the example
What would need to be proven?
Taste and repeat purchase at a realistic price. Contribution after trade terms, promotion, new production costs and sales displaced from existing products. A retailer willing to trial the offer. Test the economics under high, lower and volatile cocoa prices, rather than assuming prices only rise.
The model would separate gross profit per pack from total profit: a higher margin on fewer sales is not necessarily a better business. Pilot measures would include repeat purchase, category incrementality, contribution and cocoa exposure.
Where sustainability matters
Weather and agricultural conditions affect cocoa supply, but do not explain every price movement. Using less cocoa does not, by itself, demonstrate a better environmental or social outcome. Replacement ingredients and sourcing practices need their own assessment.
For farmer returns, examine farmgate prices, volumes, payment terms and purchasing commitments against relevant living income benchmarks. A higher price alone does not establish a living income. Reducing cocoa purchases could also affect farmer sales; that trade-off must be considered, not hidden.
How the economics would be compared
Compare the existing product, a revised product and a complementary new offer. For each, estimate net revenue after trade terms, cost of goods, launch and operating costs, likely sales and switching within the range. Identify who funds any sourcing premium and how payments reach farmers. No price premium, sales uplift or automatic win for every stakeholder is assumed.
Evidence and boundaries
The market context draws on ICCO’s 2024/25 annual report and Mondelēz’s 2025 results commentary. Fairtrade’s living income reference price guidance informs the farmer price considerations. These sources provide context, not proof of this proposed outcome.
The product concept, proposed work and potential outcomes are illustrative. No sales uplift or completed client result is claimed. Specialist research, formulation and impact assessment would be scoped with the client. No proprietary third-party data or research platform is included or implied.
Develop the opportunity together
What could changing conditions make possible for your business?
Nic Kaftan brings more than 20 years of commercial experience to the work, connecting customer understanding with offer development and the economics of growth.
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