As you participate and dig in deeper into the Chocobo Hot and Cold minigame, you will find treasures that upgrade Choco. These upgrades will allow him to traverse across various terrains, like mountains and oceans. It is with the Mountain Ability that you will start finding Dead Peppers at the locations where you can dig. These handy little items allow Choco to find some extra treasures out on the world map. Once you have some, head to a spot where you might find said treasure, open the menu and there will be an option to use a Dead Pepper.
The Dead Pepper treasures are split into two different categories, Mountain Cracks and Dive Spots. The Mountain Cracks require the Mountain Ability, while the Dive Spots require the Ocean Ability. These treasures are definitely worth seeking out, since they usually contain some powerful pieces of equipment. The cracks are easily distinguishable by the cracks in the mountains, while Dive Spots can be spotted from the bubbles forming on the ocean's surface. There's five of each treasure, and you will actually need to get each one if you wish to start the Chocobo Beaches side quest.
(#1) This Mountain Crack will be on the frozen continent in the northwest, towards the northeast corner of the continent. Look on the inside of the alcove in the mountain range there until you spot the obvious crack, which is where you will use the Dead Pepper. If done right, you'll receive 41 Lapis Lazulis, a Rosetta Ring, a Protect Ring and an Airship Card.
(#2) This one and the third one are found on the Forgotten Continent, which is the landmass on the western side of the world map. Normally, you can't reach them until you have the Sky Ability, but it's possible to get both treasures during the forced expedition during Disc 3. To find the Mountain Crack, locate Oeilvert on the world map and head straight north from it. You should be able to spot a crescent-like forest on your right, which is where you want to be. The crack will be right next to that little forest. Use a Dead Pepper to uncover the treasure, netting you 19 Eye Drops, a Madain's Ring, a Genji Helmet, and a Hilda Garde 1 Card.
(#3) Continue southwest from the previous crack, until you come to another isolated forest. The crack here is a little more challenging to see, as it blends in better, but it will be on the mountain ledge. Your reward for this crack will be a Maiden Prayer, a Dragon's Hair, some Gauntlets, and an Odin Card.
(#4) The final two Mountain Cracks aren't really treasures, as they lead to optional locations. The fourth one is accessible when you have the Ocean Ability and is found on the large island to the north of the Outer Continent (the northeastern one). Follow the mountains here to where it splits into a U-shape and that is where you will find the crack. Note that this leads to Mognet Central.
(#5) The final Mountain Crack requires the Sky Ability for Choco. Once you have this, fly to the northwest corner of the world map to find an island that isn't marked. Land in the forest and you will find the crack pretty easily. This one leads to Chocobo's Paradise.
(#1) It's hard to describe the first Dive Spot, as it's pretty much in the middle of the ocean. Go to the northern edge of the map, pretty much in the middle of it and look for the bubbles. This spot will reward you with 50 Potions, 25 Hi-Potions, 9 Ethers and 7 Elixirs.
(#2) You will be heading to the southeastern tip of the Outer Continent for this one. Look for the long stretch of beach there, then head southwest a little bit to find the bubbles. Dive to the bottom of the ocean to be rewarded with 8 Straw Hats, 8 Pearl Armlets, 7 Aloha T-shirts, and 8 Sandals.
(#3) For the third Dive Spot, travel to the southern tip of the southwestern continent. There is a little alcove there, right next to a forest, where you can see the bubbles, so use a Dead Pepper there to receive 10 Remedies, a Black Robe, some Genji Gloves, and a Blue Narciss Card.
(#4) The fourth Dive Spot is easily accessible from inside of Quan's Dwelling on the Mist Continent, which is close to the city of Treno. Head all the way to the outside portion and look for the prompt. Choose to use a Dead Pepper and Choco will dive into the ocean, netting you 9 Ores, 15 Topazes, a Tiger Racket, and a Red Rose Card.
(#5) The final Dive Spot cannot be gotten until Disc 4 and doesn't have the bubbles like the others, so you are kind of going in blind. The dig spot is actually just a bit northwest of the white dot for Shimmering Island on the map. It'll be a little bit away from the smaller glacier there; dig up the treasure to receive 10 Aquamarines, a Ultima Weapon, a Maximillian and an Invincible Card.