Higher chocolate prices this Easter are due to disruptions in the food supply chain, which consumers are increasingly noticing. The spike in lettuce prices and rising orange juice prices are other recent examples of disruptions due to weather and disease. Cocoa futures have increased significantly in the past year due to bad crops in West Africa. The confectionery business is expected to bear the brunt of the margin impact due to cocoa price hikes. Climate change and disease have led to a 30 percent decline in cocoa production in Côte D’Ivoire over the past year, contributing to the rise in prices.
Cocoa production is highly concentrated in a few areas, making it vulnerable to disruptions. While cocoa prices don’t directly translate to retail prices, they do have an impact on the cost of chocolate bars. Retail prices are expected to increase as a result of the higher cocoa prices. Consumers have already seen the price of confectionary items rise more than nine percent between January 2023 and 2024. Manufacturers struggling with high sugar prices over the past three years are now facing obstacles due to higher cocoa prices. There are concerns that higher prices could lead to a decline in chocolate sales.
Consumers are becoming more aware of food supply chain disruptions and are paying closer attention to food prices and production methods. In a survey by Deloitte, almost three-quarters of respondents said it was important to understand where their food comes from. Cocoa farming in West Africa has led to the destruction of rainforests, impacting ecological diversity and crop vulnerability. Cocoa farmers in Ghana and Côte D’Ivoire are paid a minimum price set by the government for the season, but multinational companies enter into forward contracts for cocoa prices. Consumers looking to make ethical choices can seek out transparent supply chains and support businesses that specialize in ethically sourced cocoa products.
Ethical spending decisions regarding chocolate can be challenging due to the price gap between premium and mass-market confections. Consumers are encouraged to educate themselves on the origin of cocoa in products and seek out businesses that source ethical cocoa. While there is potential for cocoa to be grown more sustainably in the long term, it may result in lower production in the short term. It is important for consumers to consider who is bearing the costs of sustainable cocoa production and ensure that smallholder farmers are not unfairly burdened.Overall, the disruptions in the food supply chain, including the increase in cocoa prices, are leading consumers to become more conscious of where their food comes from and how it is produced.
