Cocoa costs and climate risks: What drives new Barry Callebaut AI hub

The chocolate giant officially opened its Callebaut Global Innovation Center (GIC) on February 10 in Singapore, a country recognised for its focus on food innovation and AI to bolster food security.

While climate change is putting an unprecedented squeeze on cocoa supply, consumers remain uncompromising in their expectations for taste, texture and mouthfeel – creating demand for more cost-effective chocolate solutions.

“We need affordable alternatives that still taste good, because consumers are not willing to compromise on the taste experience. That’s where cacao coatings – or compounds – can emphasise the goodness of cacao in products. We are also developing non-cocoa solutions to make our portfolio more resilient,” President for Customer Experience Dries Roekaerts told FoodNavigator at the event.

Cacao coatings are formulations in which cocoa butter is replaced with vegetable fats and oils.

According to Roekaerts, the firm has been able to closely mimic the texture, melting behaviour and taste of chocolate through a combination of cocoa ingredients, milk blends and customised fat systems developed with suppliers.

This is where the GIC plays a role, with chefs translating these formulations into applications such as biscuits and ice cream.

Leveraging AI for chocolate innovation

The GIC combines cacao coating expertise with AI tools to support formulation design, flavour development and cost optimisation.

“A configurator helps to tailor formulations for flavour, texture, tropical performance, or nutrition,” Chief Digital Officer Amr Arafa told us.

“Developers can ask the AI configurator, ‘How do we get better margins?’, or ‘How do we reduce the cost by looking at alternatives for ingredients that are expensive today but still provide the same texture?’”

Arafa added that the GIC is also developing additional AI engines to support recipe optimisation, sustainability and insights.

“AI is reshaping how food is created, tested, and experienced. It’s speeding up innovation, enabling personalisation, and opening new possibilities we couldn’t reach before. We see AI as a catalyst that changes how we imagine, design, and deliver the chocolate of the future,” Arafa said.

Beyond traditional chocolate formulations, Roekaerts said the firm is also exploring health-led concepts while ensuring taste is not compromised.

Regional preferences for chocolate

In Asia, demand for “healthy indulgence” is accelerating, prompting the firm to focus on naturally occurring compounds in chocolate to highlight functional benefits.

Flavanols, for example, are naturally occurring compounds associated with antioxidant and anti-inflammatory properties, and are often linked to benefits related to heart, skin and cognitive health.

“As we speak, we are launching some of these products in the China market. They were also developed here at the Global Innovation Center in Singapore, which will allow us to move from a more niche market to a more mainstream one by offering chocolate with added health benefits,” said Roekaerts.

Beyond flavanols, the firm’s R&D work also spans sugar reduction and protein enrichment to broaden chocolate’s health-led appeal.

The Asian market is also generally more receptive to chocolate alternatives compared to other regions due to cost concerns.

“For cacao coatings, the Asian market reacts very positively because they are looking for affordability, and they are also more open to new products and new experiences,” said Roekaerts.

“While the typical European and American markets are more traditional, AMEA markets show more openness to new products, new textures, and new flavours. Furthermore, the use of local ingredients also resonates well with the local markets.”

Roekaerts also observed that chocolate consumption is growing faster in the AMEA (Asia, Middle East, and Africa) markets compared to other regions.

This could be due to a generally younger demographic compared to Europe or the US.

“Younger consumers also tend to react positively to non-cocoa alternatives because of their lower carbon footprint,” Roekaerts said.

Additionally, cultural preferences will also affect choices.

Western markets tend to be more used to bitter and dark chocolate, while Asian markets lean towards sweeter profiles. However, there are different tastebuds across Asia. For instance, Indonesian consumers tend to prefer sweeter profiles than Chinese consumers, Roekaerts noted.

Apart from taste preferences, there are also varying levels of acceptance of alternative chocolates across markets.

Cacao coatings vs natural cocoa butter

Resistance to compound-based formulations tends to be limited to the premium end of the chocolate market, where traditional recipes remain important.

“We should distinguish between very high-end, premium chocolate brands, which tend to stick with traditional chocolate recipes. When you move into more mainstream brands – including biscuits and ice cream – we see major brands making that shift with strong consumer acceptance,” said Roekaerts.

“In some cases, acceptance is even better than for traditional chocolate. So we clearly see a growing trend in the use of cocoa coatings, and we believe this shift is here to stay.”

Given these varied regional preferences, the firm chose Singapore as the base for its GIC due to strategic, talent and ecosystem considerations.

“First, our cacao coatings business is headquartered here. Second, Singapore has a very strong innovation ecosystem – universities, startups, suppliers and partners are all based here,” said Arafa.

“Third is the agility of Singapore, and of the broader Asian region. There is a strong innovation vibe and dynamic here, and our global network allows us to scale the innovations developed in Singapore – not only within Asia, but globally.

“The country is also actively investing in AI and technology, and its proximity to India gives us access to significant innovation and talent.”

Access to a younger talent pool within the region, faster speed to market, and a pragmatic regulatory environment were also cited as factors.

“Working with the government and the wider ecosystem here is very pragmatic, with limited bureaucracy. This GIC project moved at lightning speed – we announced the centre in November 2024, and it is now fully operational, with products already coming out of it and AI being embedded into our daily practices,” said Arafa.