Food and Drink Federation offers key inflation warning, as cocoa prices impact retail
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The UK’s Food and Drink Federation has warned that continued pressures on inflation, including affecting confectionery and snacks ranges is likely to continue, amid ongoing spikes in ingredients costs, writes Neill Barston.
As previously reported, commodity prices have continued to surge in the past year, and into 2025, with cocoa reaching comparative fresh highs of $12,000 a tonne on Futures markets.
In addition, it its confectionery, and chocolate in particular that has experiences especially high price spikes during the past year (and more), with figures reported to have risen between 15-20% in many instances, reflecting the elevated costs of cocoa, sugar, and cocoa butter that have caused major headaches for both SME manufacturers and larger corporations alike.
Moreover, as far as supply chains are concerned, this has not filtered down to farmgate prices being paid to regional producers, with prices in Ghana reportedly taking a dip, despite the country being renowned for the quality of its beans, with elevated costs of ingredients also being passed on to consumers.
Social media users in the UK have been quick to post their dislike of chocolate price rises over the past two years, which have continued apace into 2025 – which has also seen an increasing tide of ‘shrinkflation’ where individual product portion sizes are becoming smaller, while retail prices have been bumped up in the wake of core ingredients costing more.
Balwinder Dhoot, Director of Industry Growth and Sustainability, The Food and Drink Federation (FDF), commented on the situation, including the rise in cocoa prices.
“Whilst food and drink manufacturers continue to work hard to keep costs down for consumers, we saw food and drink price inflation surge to 3.3% in the first month of 2025, up from 2.0% in December 2024. Rising energy and water bills as well as higher commodity prices, like dairy and cocoa, are all having an impact on production costs.
“Unfortunately, this month isn’t likely to be a flash in the pan for rising food and drink prices. We’re yet to see the full impact of increasing labour costs, with changes to both National Minimum Wage and National Insurance Contributions coming into force in April, and we expect to see this filter through to shoppers over the coming year. We urge government to work with industry to simplify regulation and bring business costs down to help protect consumers from rising prices.”
