Since April last year, cocoa prices have been reaching unprecedented highs. The crisis has sent industry into a tailspin, with many predicting losses due to the price of the crop.
With such price increases, costs are often passed on to consumers. Has this been the case with chocolate, and if so, by how much?
What is happening with cocoa prices?
Cocoa prices started going up in March of last year, due to the pressure of unpredictable weather patterns and swollen shoot virus (SSV), a type of crop disease, in key cocoa growing countries of Ghana and Côte d’Ivoire.
Alongside these more natural factors, economics also bit hard, with fewer subsidies for fertilisers making production trickier.
Prices fell somewhat in the second half of 2024, but reached a new record in January this year.
Adding to weather and disease were factors such as the impact of nearby gold mining on soil health, boosted by economic fears after Donald Trump’s election to the US Presidency.
Now, prices may be stabilising, and they are significantly down from the highs of January. However, they remain far higher than pre-2024 levels.
Has chocolate gone up in price?
Cocoa prices have put significant upward pressure on the price of chocolate.
Between 2023 and 2024, according to Euromonitor, the retail value RSP of chocolate confectionary grew by 9%, whereas between 2022 and 2023 it grew by 9.4%, both higher than the previous three years.
In the UK, the price per kilogram of chocolate has increased by 28% in the last two years, according to Kantar.
How have prices affected consumer demand?
High Easter egg prices, according to Euromonitor’s Margaux Laine, are in a different category, as consumers are more likely to put up with high prices for foods linked to occasions.
Everyday chocolate, however, is a different story. According to data from Kantar, volume sales of chocolate have gone down by 4%, quite unlike coffee, which has remained fairly consistent.
Manufacturers must, of course, juggle the need to raise prices with the fear of reducing demand.
“Retailers and large companies mitigate the impact of price increases in three ways: they withdraw mass promotions from shelves and instead focus any promotions on loyalty-card holders to maximise the ROI; they invest in Price-Pack architecture studies that effectively helps them identify the right size of packs within the range at the optimal price to maintain sales; and they repeat price elasticity studies more frequently to identify the optimal depth of discount (it does not always have to be deep),” explains Ananda Roy, senior vice president of global thought leadership and strategic insights at Circana.