Cocoa prices are at an all-time high. Here's what it means for your chocolate fix (2024)

Valentine’s Day may have come and gone, but the cost of chocolate’s core ingredient isn’t expected to fall any time soon. Cocoa prices are at an all-time high.

Poor harvests due to extreme weather, pests and disease in Ghana and the Ivory Coast, which produce most of the world’s cocoa, have hurt supply. According to a CoBank report, prices are roughly 65 per cent higher than last year.

Article content

“There were massive rains, and then there was a massive dry spell coupled with wind,” CoBank senior analyst Billy Roberts told NPR. “It led to some pretty harsh growing conditions for cocoa.”

Cocoa futures have been increasing since 2022. Given the life cycle of cacao trees, experts only expect prices to keep rising in the next couple of years. And, though chocolate lovers aren’t experiencing much sticker shock now, they predict this will change by the end of 2024.

“For milk chocolate folks, it won’t be that significant. But dark chocolate fans will probably have to pay more. The more cocoa content you have in your chocolate, the more likely you’ll see prices increase,” Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, told the National Post in November 2023.

Coupled with the high cost of sugar, Mondelēz (owner of Cadbury, Toblerone and others) said increased cocoa prices “would be one of its biggest challenges this year,” The Guardian reports.

Candy manufacturers have been offsetting the higher costs of cocoa with price hikes “without losing much demand,” Reuters reports. And they’ve indicated there may be more to come.

Article content

Article content

A Cadbury spokesperson said in a post on X in January that upping prices “is always a last resort.” But, due to the rising cost of core ingredients, energy, packaging and transport, “we are having to make some carefully considered price increases across our range so we can continue to provide consumers with the brands they love without compromising on taste or quality.”

Hershey CEO Michele Buck said during an earnings call on Feb. 8, “Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business.”

Of course, increasing retail prices isn’t the only way chocolate makers can close the gap on years of surging cocoa prices. Shrinkflation (reducing the size of a product and selling it at the same price) and skimpflation (changing a product’s formulation to include cheaper ingredients) are common tactics in the food and beverage industry.

“Maybe by reducing the actual size of the bars of chocolate, what the consumer sees is mitigated a bit, so you’re not seeing that the price of cocoa for the producer is up 50 per cent,” Matthew Spooner, a supply chain thought leader at Kinaxis, told Food Dive.

Article content

Spooner added that customers aren’t likely to face higher prices for Easter, given the chocolate bunnies and cream eggs have already been produced and packaged. But it could be a different story closer to the end of the year, leading up to Halloween and Christmas. “Manufacturers are going to have to start to pass on some of those additional costs.”

Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our cookbook and recipe newsletter, Cook This, here.

Article content