Around the world, “chocflation” is leaving a bitter taste for chocolate-lovers.

Big name brands such as Lindt and Hershey last year hiked their prices by double-digit percentages. The inflation is driven largely by an increase in cocoa prices, which hit an all-time high in 2024 when crops in West Africa — responsible for 80% of the world’s cocoa production — suffered droughts worsened by climate change.

Since then, prices have fallen dramatically but remain well above what they were five years ago, and experts say market volatility is likely to continue. Singapore-based start-up Prefer is trying to reduce the burden on consumers, by making cocoa-free cocoa powder.

“Very simply, we are able to create cocoa flavors and ingredients without the cocoa beans,” says Jake Berber, who co-founded the food-tech company in 2022.

PreferChoc is produced by fermenting and roasting seeds and grains. It can then be used in a variety of applications, from drinking chocolate to baking and confectionery.

Berber hopes the company’s products, which include a coffee bean-free coffee substitute — another commodity whose prices have been driven up by adverse weather — will allow consumers to continue to enjoy foods threatened by climate change.

Berber sees its primary market as supplying large chocolate manufacturers to create products where PreferChoc is blended with traditional cocoa powder.

“Receptivity has actually been quite strong … especially from mass-market consumers where price is extremely important to them,” says Berber. He claims that for “anywhere between the 30 and 50% inclusion rate” of PreferChoc in hybrid chocolate products “there is no change in flavor.”

Berber expects to launch PreferChoc commercially in 2026. He points to the company’s coffee — which was brought to market in 2025 and is currently available in Singapore, Vietnam, and the Philippines — as showing the potential for cheaper alternatives.

“We’re able to help even the largest coffee businesses in the world reduce their cost of coffee by about 50%,” says Berber. “We believe that we can help chocolate manufacturers reduce their cocoa powder costs by up to 50% as well.”

He adds that PreferChoc also has sustainability benefits.

The production of dark chocolate and coffee has a large carbon footprint, and Berber says that an independent life cycle analysis of Prefer’s coffee showed its production emits almost nine times less carbon dioxide equivalent gasses than traditional coffee — and he expects its chocolate to show similar reductions in emissions.

In some regions, cocoa production also drives deforestation. Research shows that in the world’s largest producers, Ivory Coast and Ghana, cocoa cultivation drives over 37% and 13% of forest loss in protected areas, respectively.

Mirte Gosker, managing director of the Asia Pacific region at the Good Food Institute (GFI), which promotes global sustainable food systems, says that producing cocoa ingredients by fermentation “could reduce some of the environmental impacts of their growth.”

She describes the fermentation-derived food sector as “an enormous opportunity to make more food with fewer natural resources.”

“Bioreactors used to produce fermentation-derived foods are very space efficient,” she adds. “When facilities are scaled up, fermentation can produce many tons of biomass every hour.”

Berber says he cannot reveal the ingredients used to make PreferChoc while it remains in development but explains they are similar to those used in Prefer’s coffee — rice and chickpeas. He adds that regulators have deemed its ingredients to be “non-novel” and that the company didn’t yet know if there were nutritional differences compared to conventional cocoa or coffee.

“We use staples of our food system,” he says, “ingredients … that really are scalable and (using them) wouldn’t move the needle on (their) price or availability.”

Other companies making chocolate alternatives without cocoa beans include Germany’s Planet A Foods, which uses sunflower seeds, oats, and other ingredients, and UK-based Nukoko, which uses fava beans.

Gosker highlights the Asian market as a particular area of opportunity for fermentation-derived alternative foods, such as PreferChoc.

“Given the long history of traditional fermentation as a production method in various Asian cuisines, we are optimistic that consumers will gravitate towards products created through fermentation if they hit the mark on taste, texture, price, and nutrition,” she says.

“Asian tech hubs have also served as launchpads for many innovative limited-run products made through … fermentation,” she says, adding that, in 2022, Singapore was the first to grant regulatory approval to Solar Foods, a Finnish company that feeds microbes carbon dioxide, hydrogen and oxygen to create proteins.

But she says more government and private investment in the sector is “urgently” needed, particularly to fund research into better understanding of consumer perceptions of fermentation-derived alternative foods, and the manufacturing infrastructure required to produce them.

“As neither precision-fermented or biomass ingredients have been rolled out on a large scale, we do not yet have data to show which (if any) ingredients or products will ultimately draw significant consumer interest,” she says.

“In terms of scaling up production, there will need to be significantly more investment into fermentation infrastructure in Asia Pacific,” she adds. GFI research shows that existing fermentation bioreactor capacity is predominantly concentrated in Europe (47%) and the US (34%).

Prefer has raised $7 million in private and public investment, but it is not yet making a profit. Berber says it is looking to raise more funding this year, to build a factory to upscale production.

He also hopes to expand to producing other ingredients facing supply chain disruptions, such as vanilla and hazelnut.

Berber stresses that he wants to work with the chocolate industry rather than against it. “Consumers are not asking for an alternative to coffee or chocolate, they’re complaining about more expensive coffee and chocolate,” he says.

“A way that we can have a solution to that problem, so that we can move more volume and in turn create more impact, is to create hybrid products that taste the same for them but cost less.”