Cocoa prices have skyrocketed over the last two years. This dramatic jump comes during a time when chocolate products will be in high demand as consumers prepare for an Easter celebration. Tight global supply Recent reports show that cocoa prices have soared to over US$12,000 per ton in 2024. They have recently stabilized at just under US$8,000 per ton. In 2022, it climbed to US$2,000 per ton. This sudden jump is now cause for alarm for confectionery producers and chocolate-lovers alike.
Unsurprisingly, extreme weather conditions in major cocoa-growing regions have played a major role in these price hikes. The near-constant climate crises of recent years have not only crippled production efforts, but increased the volatility of cocoa futures prices. Because of this, confectionery manufacturers are dealing with increased costs which are unavoidable and passed down to consumers.
You can see the impact of these cocoa price fluctuations when you look at the increasing price tags on Easter chocolate favorites. As a small manufacturer, Daniel Poncelet, owner of Daniel Chocolates, saw an extreme price impact. His chocolate Easter bunny has more than doubled in price in just a few short years.
“When your price of chocolate triples … you cannot keep the same price. It’s impossible,” – Daniel Poncelet
Poncelet had some pretty eye-opening things to say about consumers’ penchant for going out this Easter. Families are buying less chocolate bunnies now, Skelley said, with many approving rising prices.
“People are not going to buy a dozen bunnies. They’re going to buy maybe one for each kid, and that’s it,” – Poncelet
In 2022 the inflation rate for all confectionery products was 8.9% compared with overall inflation rate of 7.9%. Indeed, in March 2024, prices for these goods soared by 5.7 percent year-over-year. This increase added additional pressure on consumers as they shopped for the holidays.
Although high cocoa prices continue to plague confectionery manufacturers, soaring sugar prices in 2024 experienced a bit of a reprieve. The soaring price of cocoa still seems to overshadow every other industry discussion with a death knell. Specifically, Mondelez International and their fellow companies are projecting adjusted earnings per share to fall by 2025. They are blaming this projection on what they term as “unprecedented cocoa inflation.”
Agricultural lender Farm Credit Canada was quick to second those concerns. They expressed concerns that high cocoa prices coupled with continued disruptions to trade would increasingly pinch profit margins in the industry.
“If cocoa prices stay high and trade disruptions persist, margins will be squeezed further in the sector,” – Farm Credit Canada
The effects of skyrocketing cocoa prices go beyond supply and demand. They are the ones actively shaping consumer experiences and ultimately consumer expectations. Joel Gregoire added that premium chocolate products have to strike a difficult balance between quality and price.
“It’s got to be tied to a certain experience, and I would say, presumably, a future memory, which kind of ups the stakes,” – Joel Gregoire
As the Easter holiday approaches, consumers face a difficult choice: spend more on premium chocolate or cut back on purchases. Poncelet conceded that there were plans to raise and lower prices based on variable market conditions.
“That means that maybe starting in July, we will be able to lower our prices accordingly,” – Poncelet
While there is reason to be hopeful that prices come down in the future, the current environment is especially tough on manufacturers and would-be consumers. And the skyrocketing prices of cocoa are pushing market share from confectionery to chocolate. With Easter just around the corner, families will be harder-pressed than ever to buy their favorite chocolate goodies with these increased costs.
