With Cocoa Prices In Chaos, Mid-Day Squares Buys in Bitcoin

MDS is officially doing business in BTC.

Canadian chocolate bar brand Mid-Day Squares announced last month that it had begun buying cocoa from international suppliers using Bitcoin, with co-founder Nick Saltarelli stating in social media posts that traders in many countries now “trust this method of payment more than fiat” currencies issued by governments.

Speaking with Nosh this week, Saltarelli went deeper on the arrangement, noting that Mid-Day Squares’ direct farm partners in South America and Africa – which include sellers in Cote D’Ivoire, Colombia, Peru and Ecuador – have increasingly embraced Bitcoin in large part due to the speed and convenience of transaction, as well as lower transaction fees and the long-term investment potential of cryptocurrency.

“There’s an ecosystem that has been created,” Saltarelli said. “What I’m noticing here is there’s not even really a care to [convert] it to a currency…. Bitcoin is in and of itself the currency that they’re going to hold, and therefore no intermediaries are required.”

Mid-Day Squares developed a direct importation system over a year ago after the price of raw cocoa skyrocketed amid a supply crisis that has yet to abate; the price of cocoa beans has risen over 143% since January 2024 and chocolate snack prices are on pace to increase by double-digits this year.

The volatility of cocoa prices, which have been particularly impacted by crop disease and poor weather in West Africa, has also been part of the drive for farmers to prefer crypto over traditional currencies. Although Saltarelli said he had personally been enthusiastic about cryptocurrency for several years, it was the foreign traders who first pitched the Montreal-based bar brand on using Bitcoin to pay for cocoa purchases.

Both parties, he said, appreciate the ability to cut out middlemen vendors, such as Western Union. Instead, the electronic currency allows for immediate payments and cuts out the need for the farmers to use third parties to retrieve their cash.

“That, for me, is the most exciting aspect of where I see this going,” Saltarelli said. “And it’s only capable because [many people in] these countries trust the currency to be even a stronger store of value than their own currencies.”

Because Bitcoin’s own price is highly volatile – it’s typical for its value to rise and fall and rise again by thousands of dollars within a single day – Mid-Day Squares is not holding Bitcoin on its balance sheet (at least not for now), but instead makes the conversion from dollars to crypto only for transactions.

Mid-Day Squares’ willingness to use Bitcoin has also been advantageous in closing deals. In a strained cocoa market, Saltarelli said the brand is able to become a preferred buyer for many cocoa sellers, giving them an edge in brand-side competition for the supply.

Often, Saltarelli said, he will begin a conversation with a new supply partner by sending them $100 worth of Bitcoin in order to open up negotiations.

“You’ve created a transaction with the person, and they’re ready now, like ‘Whoa, okay, what? How can I help you?’ That’s the power of this thing,” he said. “I’m thousands of kilometers away, but I can get cash to people’s hands as if I was on the ground.”

It wasn’t immediately clear if other companies are following suit in using crypto to procure cocoa supply, or how widespread the practice of farmers preferring to do business in Bitcoin is.

However, at least some entrepreneurs see the potential. Chris Young, CEO of Pocket’s Chocolates, said via email that his company has hedged against the cocoa pricing crisis by locking in futures contracts, although he recognized that Bitcoin currently appreciates better than the U.S. dollar.

“We don’t opt for that, since cacao has more than enough volatility as it is,” he wrote. “Flattening our COGS with a futures spread is most pertinent to us, but perhaps I should revisit this idea.”

Saltarelli suggested it’s also another tool in the brand’s belt as international trade relations have been thrown into uncertainty with the new U.S. Presidential administration.

He said that the company was misrepresented in an article in The Globe and Mail earlier this month which suggested that Mid-Day Squares was considering moving operations to the U.S. as President Donald Trump looked to be moving to impose his long-threatened tariffs on Canadian goods.

Saltarelli told Nosh that the company is making no such consideration and recently invested over $13 million into a facility expansion in Canada that is still underway. While broad-sweeping tariffs could someday push the company to explore an American manufacturing facility, the company feels that is an unlikely worst-case scenario and has no plans to relocate.

“If it was a dire situation, then 100% we would have to consider building a plant in the U.S. to avoid that,” he said. “Of which – this is the key quote – we do not believe will happen.”

Still, with the global market in flux, Saltarelli suggested that the best approach is to just play the game, and Bitcoin is one more way to play.

“It’s up to us as companies to adapt and figure out how to make things work, that is the game of capitalism,” he said. “You can’t just sit back and rely on governments getting along all over the world, and if you do so as an entrepreneur you expose yourself to having to worry about what’s not in your control.”