The sweet baskets of Easter will likely take a bitter toll on consumers this year as the price of cocoa rises to record levels. Cocoa futures have soared this year, nearly doubling since early 2024. Rising temperatures and weather conditions have overwhelmed and damaged crops in West Africa, which produces more than 70% of the world’s supply of cocoa. cocoa.
Sugar prices are also rising. The futures for a pound of sugar have increased by around 8% in 2024, after having risen a 2.7% in 2023.
Big chocolate companies like Hershey’s and Cadbury maker Mondelez have been passing those costs on to consumers — and then some: Hershey’s net profit margins rose by 16.7% in 2023 from 15.8% in 2022. Mondelez recorded a jump to 13.8% in 2023 from 8.6% of 2022.
Both companies reported declining sales volumes in their most recent quarters as consumers tire of paying higher prices.
The National Retail Federation expects a drop in Easter spending this year, although the overall figure remains high by historical standards. Its latest survey shows that consumers are expected to spend $3.1 billion on candy this Easter, or $24.78 per person. That’s down from $3.3 billion, or $26.31 per person, a year ago.
Mondelez, owner of the Cadbury Easter basket, has been relying on price increases to offset rising cocoa prices. The company has said it controls a stake in 13% in the world chocolate market. It recognized price increases of up to fifteen% within its chocolate category in 2023 and that higher prices will likely be a key factor in meeting revenue growth forecasts of up to 5% in 2024.
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Source: Gestion
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