This Valentine's Day, the cost of chocolate has risen by 20%, marking a new high in cocoa prices.
This upcoming Valentine's Day, you're likely to pay 10-20% more for your sweet treats, as cocoa prices have skyrocketed since early 2024. According to David Branch, sector manager at Wells Fargo Agri-Food Institute, cocoa hit a record high of $12,646 per metric ton in December.
The reasons behind this cocoa price explosion stem from a perfect storm of weather-related challenges and diseases in West Africa, the heartland of cocoa production. Years of unstable weather and the cocoa swollen shoot virus have heavily impacted cocoa yields, causing supply deficits and sending prices soaring.
The production process has become considerably more expensive due to labor shortages and increased fuel prices. Consequently, the cost of manufacturing chocolate has skyrocketed by over 167% in the last two years, according to the Producer Price Index.
Retailers are swiftly responding to these rising costs, hiking chocolate prices accordingly. Companies like Lindt have raised their prices and anticipate doing so again in 2025. For instance, a 5.7 oz box of Lindt Valentine’s heart chocolate candy truffles now costs $21.99.
While Hershey's sources its cocoa a year in advance, it is planning to collaborate with retail partners to offer a range of products suited to various price points, ensuring consumer satisfaction.
Mondelez International, the parent company of Cadbury and Toblerone, also grappled with the unprecedented cocoa cost inflation this year, as their fourth quarter earnings report testified.
To mitigate the impact of these higher cocoa prices, shoppers might consider opting for chocolate products with lower cocoa content or fillers, which tend to be more affordable.
It's worth noting that cocoa futures have surged by 143% in the past year, with unpredictable weather in West Africa and increased demand continuing to drive prices up. However, commodity market prices can shift rapidly, so it's essential to stay informed.
The Ivory Coast and Ghana, which account for 70% of global cocoa production, have faced challenges in maintaining their harvest levels due to unpredictable weather and diseases. This situation opens the door for potential cocoa production in other countries, like Ecuador, but it's a long-term solution that won't rectify the current deficit in the short term.
The increase in cocoa prices has significantly impacted the chocolate business, leading to higher production costs for manufacturers like Mondelez International and Hershey's. In an attempt to manage these costs, retailers are raising the prices of popular chocolate items, such as Lindt Valentine's heart chocolate candy truffles.
