Mondelez & Hershey facing Easter Cocoa Crisis
In the run-up to Easter, soaring cocoa and sugar prices is seeing chocolate makers promoting non-chocolate products such as biscuits, as shoppers baulk at the high price of chocolate.
Cocoa prices have tripled over the past 12 months, following ongoing bean disease in West Africa.Sugar prices are also on the up.
Cocoa farmers across West Africa have been hit by several plant diseases that are ruining crops on a vast scale and pushing up the global price of cacao – the raw material for making chocolate – to record levels.
Fungal black pod disease is just one of many affecting farmers, caused by months of wet weather. Another major problem in Ghana and Ivory Coast is cocoa swollen shoot virus, which is spread by insects.
Together, Ivory Coast and Ghana supply more than half of the world’s demand for cocoa.
Chocolate makers including Hershey and Mondelez have said they will hike prices again to cover the cocoa availability crisis, but price increases are coming at a time when consumers have already been hard hit by across the board cost inflation.
US is world's biggest consumer of chocolate
The US is the world's biggest chocolate consumer, and although sales are expected to be around last year's total of $5.4bn, Reuters reports that this is due to price increases, not volumes sold, according to the National Confectioners Association.
Easter is the third-biggest US occasion for chocolate and confectionary sales. Halloween is top, followed by Thanksgiving and Christmas.
“People will buy during the holidays, but they will cut out impulse buying," through the year, said David Branch, a sector manager focusing on cocoa at Wells Fargo Agri-Food Institute, speaking to Reuters.
Data from the National Confectioners Association shows that last year, the volume of chocolate and candy sold fell 3.6% compared to 2022.
Hershey is shipping more non-cocoa treats to retailers this Easter, and is introducing a new six-pack of cookies 'n' cream bunnies, offering full-sized Kit Kat lemon crisp bars and mixing Haribo gummy bears with chocolate bars in its assortment bags.
Hershey spokesperson Allison Kleinfelter told Reuters consumers are “continuing to buy seasonal products because parents want to preserve traditions like Easter baskets filled with chocolate bunnies and egg hunts”.
The non-chocolate Easter offerings have no connection to current cocoa prices, she added.
Simon Crowther, Marketing Director for Seasonal Confectionery UK at Oreo cookie-maker Mondelez told Reuters the company has introduced new premium chocolate products, including Toblerone, that are aimed at older families and upmarket shoppers who may be more willing to splurge on chocolate.
