Easter chocolate shortages warning, as price rises bite over cocoa supply challenges
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Industry concerns have been raised over the rising cost of Easter confectionery, with the continued major upturn in cocoa prices fuelled by crop supply shortages impacted by adverse weather conditions, reports Neill Barston.
With the key season’s global market worth in the region of $110 billion according to Maximise Market Research, there remains a significant amount at stake in terms of continuing momentum for the prime retailing occasion.
However, as reported by Confectionery Production, the industry has been rocked by cocoa prices doubling in the past year, with latest figures showing prices trading at $7,000 a tonne, with companies including Hershey, Mondelez and Lindt warning of disruption to trading conditions stemming from such major supply chain challenges.
In terms of specific pricing – consumer group Which highlighted a 50% rise in confectionery prices before Christmas, which is not anticipated to ease for the Easter period, as manufacturers have remained under pressure from cocoa, as well as significant increases in sugar costs.
Meanwhile, in West African nations of Ghana and Ivory Coast, which account for two thirds of the industries cocoa supplies, poor harvests for the past two years have led to a notable deficit in supplies, with additional factors including ‘galamsey’ illegal gold mining, and over-farming on protected areas of forest also proving considerable contributing factors that have negatively influenced the overall industry.
Simon Geale, EVP Procurement at Proxima, supply chain consultancy firm, commented on the situation. He said: “Recent heatwaves and extreme weather events in West Africa, where the vast majority of cocoa is produced, have severely impacted cocoa crops, leading to shortages and soaring prices. This is unwelcome news in the run up to Easter.
“It’s necessary to acknowledge that these challenges will inevitably trickle down to consumers. We’ve already witnessed chocolate makers increasing prices in response to rising cocoa costs. This year, consumers may notice smaller Easter eggs or a shift towards more premium-priced products on the shelves.
“Additionally, retailers are likely to exercise caution on their purchasing, meaning fewer last-minute Easter bargains for consumers. As we navigate through these challenges, it’s crucial for businesses to adapt and innovate to maintain supply and meet consumer demand.
“Chocolate lovers look away now, beyond Easter, the implications of cocoa shortages may well be even more acutely felt in our regular shopping baskets. With Easter demand met, shortages and cost inflation will hit the shelves. It’s chocolate now, but it will be something else next as our food supply system comes under more pressure from the effects of climate change. Will a lack of chocolate be the final straw for those dragging their heels on corporate sustainability?”