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FAST-MOVING CONSUMER GOODS
Chocolate prices rise worldwide due to cocoa shortage in West Africa
By our News Team | 2023
Chocolate may be ‘the language of love’, but consumers are not loving the price hikes as cocoa crops in Africa continue to struggle.
With the second of the two annual cocoa harvests underway in Africa’s top cocoa-producing regions of Ghana and Ivory Coast, FMCG companies that manufacture and market chocolate-based products are bracing themselves for further unavoidable price hikes that will reduce their sales.
Cocoa prices have already gone up by nearly 50% in the past year, due mainly to smaller harvests in both countries because of adverse weather conditions and crop diseases.
Photo by Pixabay via Pexels
Growers in Ghana and Ivory Coast are also having to pay more for imported fertilisers and pesticides – further driving up the price. Together, these West African nations provide about two-thirds of the world’s cocoa supply.
“The looming El Niño weather phenomenon adds to the apprehension, and analysts predict a third consecutive global shortage for the new season that is commencing, potentially resulting in continued inflation in the chocolate sector,” Food Business Africa reports.
Among the multinationals feeling the price squeeze are Mondalez – which includes the Cadbury and Toblerone brands in its stable – and Lindt & Spruengli, which has Lindt in its brand portfolio.
Consumers shop around for chocolate deals
Recently, Mondelez CEO Dirk Van de Put said consumers are “shopping around more, hoping to find deals”.
It seems retailers are also trying to find ways to keep chocolate prices down. According to news agency Reuters, one such battle resulted in Mondelez pulling Cadbury and Milka bars from Belgian supermarket chain Colruyt’s shelves after failing to agree on prices.
Reuters warned that the worsening situation is putting chocolatiers’ margins and profitability at risk.
Hershey, which is a major chocolate player in the North American market, has seen its sales volumes decline as consumers balk at paying higher prices for its products.
“The world could see further increases in chocolate prices as concerns mount over a potential cocoa crop shortage in Ghana and Ivory Coast,” Food Business Africa said in a report published on Tuesday (3 October).
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