Rising Cocoa Prices Expected to Affect Easter Chocolate Sales

Anticipated impact of increasing cocoa prices on Easter chocolate sales

March 27, 2024 TruthUSA

The cost of cocoa has seen a steady increase recently, indicating that Easter treats may be more expensive this year.

As of early March, cocoa prices stood at US$6,125 per tonne, as reported by the International Cocoa Organization (ICCO). However, by March 26, the price had soared to $9,361.

This surge in prices can be attributed to poor harvests in major producing countries like the Ivory Coast and Ghana, resulting in supply shortages. Additionally, crops suffered from damage caused by heavy rains and crop diseases, as noted by Trading Economics.

In both Ivory Coast and Ghana, the two leading cocoa producers, harvests are expected to decline by up to 33 percent and 50 percent, respectively.

Furthermore, sugar prices have risen by approximately 7 percent, with indications suggesting a potential increase of nearly 20 percent by the year’s end, according to a Reuters poll.

Projections indicate that sales of Easter treats could reach around $5.4 billion in the United States alone. While a cocoa shortage may drive prices up as demand surges for the approaching holiday weekend, some chocolatiers have been promoting non-chocolate alternatives.

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In efforts to capitalize on the season, Hershey has introduced a new six-pack of cookies n’ cream bunnies, among other offerings like Kit Kat lemon crisp bars and assorted bags featuring Haribo gummy bears and chocolate bars, as per a report by Reuters. The company clarified that these initiatives were not directly linked to the escalating cocoa prices.

In Canada, approximately 293 million kilograms of chocolate are consumed yearly, averaging 7.7 kilograms per person. By 2028, this figure is projected to rise to 9.7 kilograms per person.

In 2023, the sales volume of chocolate and candy for non-seasonal occasions dipped by 3.6 percent compared to 2022, while sales for seasonal occasions experienced a slight 0.1 percent uptick, as per the Reuters report.

Hershey recently announced a restructuring plan aimed at achieving a $300 million pre-tax savings following a revenue downturn. Similarly, Mondelez International is contemplating price hikes on chocolate products and alterations in unit weights.

Commenting on the situation, Jon Cox, an analyst at Kepler Cheuvreux, a European financial services firm, expressed concern over the continuous rise in chocolate prices, predicting a significant impact on consumer behavior.

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