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Boxes of chocolates and truffles will cost more this Valentine’s Day as confectioners pass on higher cocoa prices to consumers who are already paying more for their favorite treats.
Cocoa futures prices have doubled since October 1, according to analysis published by cryptocurrency exchange ChicksX. It was the highest price increase in half a century, Progressive Farmer reported.
ChicksX CEO Al Alof said in a statement that declining cocoa supplies will continue to create challenges for candy and chocolate.
“Companies may have to increase the price of chocolate due to rising costs of ingredients, one of which is cocoa,” he said. “Small businesses using chocolate may have to buy ingredients in smaller quantities, which could result in them missing out on savings in bulk purchases and further adding to the pressure.”
Cocoa supply problems have been triggered by poor weather and labor problems in West Africa, where most of the crop is grown. Last year, heavy rain continued in the summer, followed by a drought in the fall, leading to a decline in production. According to Wells Fargo, Ivory Coast’s cocoa production in 2024 will reportedly decline by 22.4% compared to 2023.
It was reported that last Halloween, candy producers such as Hershey increased the production of snacks that do not contain cocoa ingredients.
The confectionery giant’s candy lineup included smaller items like Hershey’s Milk Chocolate, as well as non-chocolate items like cinnamon-flavored Kit-Kat and Shaq-a-Licious XL Gummies.
David Branch, Wells Fargo’s Agri-Food Institute division manager, told Food Dive in October that the cocoa problem is so severe that premium chocolate makers will continue to charge higher prices for their premium items. Companies that make cheaper baked goods, such as Hershey, Nestlé and Mars, will have trouble keeping up with demand if the trend continues, he predicted.
Chocolate accounted for a record $21.4 billion in confectionery sales last year, with 65% of consumers enjoying chocolate, according to an October report from the National Confectioners Association.
In Hershey’s November earnings call, CFO Steve Voskuil said cocoa cost increases next year will be “quite significant.” He told investors that volatility will undoubtedly affect Hershey’s financial performance, but the company is not sure to what extent.
