Chocolate price rises explained
It’s impossible not to notice that the price of chocolate has risen exponentially over the last 12 months.
As one of the UK’s biggest chocolate distributors, we felt it was important to give you an update on the current trading situation and share our predictions on how we expect the market will perform in the coming year to help you make informed decisions.
Here, Steve Calver, Commercial Director at Henley Bridge with over 30 years’ expertise tracking the cocoa markets, shares his knowledge and expertise…
What affects chocolate pricing?
Chocolate is a commodity and therefore its price fluctuates based on supply and demand.
Factors such as global production levels, weather conditions and crop disease play significant roles in shaping price trends. For instance, lower cocoa production in major growing regions, like the Ivory Coast and Ghana, due to adverse weather conditions can contribute to tighter market conditions and influence prices.
Growing demand for real chocolate from emerging countries, such as India and China, has also contributed to increased pressure on the commodity market.
The current situation
Cacao pricing is experiencing a historical high. Figures released this month reveal that raw cacao prices have reached a record high of £4,700 per tonne, significantly more than double the price it was in February 2023 which was around £1,900 per tonne.
There are two cocoa crops a year – in May and October – and the next crop is expected to be affected by the El Nino weather pattern, resulting in drier weather conditions in Africa where 75% of the world’s cacao is grown.
Cacao price rates
Predictions for this year
Chocolate prices unfortunately look set to remain at a record high for the whole of 2024.
Price increases of 15-20% are likely for the first half of 2024 - and could potentially be replicated during the second half of the year.
Colour co-ordination
Dark chocolate was historically cheaper than milk or white chocolate (which contains more sugar and milk powder) but this trend has been completely reversed from an ingredients perspective with dark chocolate now commanding the same or similar pricing.
2025 and beyond
Examining market analysis and future projections, it’s predicted that prices could start to fall as we move into 2025/6. Due to the high cost of real chocolate, some markets may go back to using imitation chocolate which would, in turn, reduce demand, but that’s just pure speculation at this stage.
What is Henley Bridge doing to help?
From a distributor perspective, the commercial team at Henley Bridge is working hard to try and soften the blow for customers.
We held off price increases until February 1, delaying the increase by one month, and are stocking up where possible to hold off further price increases.
We’re also trying to give a one month notice period of any impending price increases to give customers time to react.
What can customers do?
Chocolate prices rises can be addressed in two ways. You can either pass on the increases to your customers by upping the price of your products, or, as we have seen with large manufacturers, adopt the ‘shrinkflation’ method, in other words, make smaller products but sell them for the same price.
