A cocoa crisis caused cocoa butter prices to skyrocket from $4,000 to $32,000 per kilo, wiping out 27% of Midday Squares' gross margin overnight.
Nick explains how a global cocoa supply crisis caused by weather, disease, and corruption devastated their margins just as they reached profitability. ✦ AI generated
Nick · My First Million · 2026-08-17 · original ↗
starts at this moment · 21:58
“What's special about the product?”
Since we started this business in 2018, chocolate went parabolic. The cost of cocoa and that means we lost like 27% of our gross margin overnight. We were killing it and chocolate we were paying $4,000 a kilo for cocoa butter went up to 32,000.
verbatim transcript · starts at 21:58
21:39>> athletes and and other chef >> and you just DM them say, "Hey, can I send you some?" >> Yeah. >> What's special about the product? >> Well, what is the product? Okay, so we started out as chocolate bars and uh crazy thing happened, you know, since we started this business in 2018. Chocolate went parabolic. The cost of cocoa and that means we lost like 27% of our gross
21:58margin overnight. We were killing it and chocolate we were paying $4,000 a kilo for cocoa butter went up to 32,000 just to give you. >> So there's like a cocoa >> crisis. >> Cocoa crisis. What? What? Why is there Why was there the cocoa crisis? So, it's the cycle that happens all the time, which is super interesting. It starts off with like a real mismatch in terms
22:17of weather will come in, disease will spread, then there won't be enough cocoa coming to the ports, and then corruption kicks in though. And corruption usually takes about 2 years. I I got stories. I went into the Ecuadorian forest, so like if you ever want to go there, we could go there. But basically, you know, when your back's against the wall, I remember we started this thing with like no UT in
22:40economics kind of like I'm not comparing this to Tesla in any sense, but build the product, no gross margin, nobody wanted to manufacture this thing. Then we went to a big kitchen and then we built the plant and we had finally reached profitability everybody and then we get smashed by this coco thing. >> Did you raise money or is this whole thing bootstrapped? >> No, no, we raised money through quasi
22:58equity and our government. So shout out to the Canadian government's super pro in agricultural manufacturing. So they were able to give >> How much in aggregate have you raised? >> 22 million in total. >> You raised $22 million. >> I built her own plant. >> Yeah. >> They're a great follow on social. In fact, I've stolen many things from your social strategy. So you guys, his wife