Chocolate Prices Soar
This year, getting that special someone a box of chocolates for Valentine’s Day may be a little more expensive than before, as the rising cost of cocoa caused chocolate producers to increase prices.
According to The New York Times, the main cause for this price increase is a growing demand for chocolate, namely dark chocolate, in Asian markets. Aside from the growing demand for cocoa, a few natural causes played a part in the price hike.
Harmattan, a dusty wind that affected cocoa production in Africa, has been worse than usual this year. The harmattan began in December, which is the beginning of the main cocoa harvesting season. Also, fungi such as witches’ broom and frosty pod—which sound like names of candy themselves—have affected cocoa trees.
Major chocolate companies such as Hershey, Mondelez International and Lindt & Sprüngli—which owns Russell Stover—raised prices as much as 8 percent last year to cope with the cost of cocoa.
Companies have also had to reduce production on products. Mondelez reduced the number of its Creme Eggs in a package to five from six. It is also no longer making the egg’s chocolate shell out of Cadbury Dairy Milk, due to an increase in milk prices last year.
Smaller companies have managed to make it through the price increase without much trouble, due mostly to sourcing cocoa from alternate sources such as Madagascar, which produces much smaller amounts of cocoa than West African countries, and produces a specific variety that is less vulnerable to disease than the primary type of cocoa.
Hershey released a statement noting that it is following in these small companies’ methods of sourcing cocoa from "certified and sustainable" farms, and plans to source 100 percent of its cocoa from such farms by 2020. Hershey also predicts that it will increase prices by 5 to 6 percent, while sales will decrease by 2 percent.
Nielson data shows that Americans bought 1.2 percent more chocolate last year than previous years, and the amount they paid for it increased by 2.6 percent to $13.6 billion.