Cocoa prices have risen over the past few years, recently reaching record levels and increasing the cost of chocolate. Scott Olson/Getty Closed subtitles
On Valentine's Day, candies and truffles are more of a luxury item.
In the third year, the cocoa harvest was very short Due to abnormal weatherThis makes cocoa beans so expensive that chocolate manufacturers have no choice but to raise their own prices.
"It's a very big change for our business model," said Alex Whitmore, who runs Boston-area manufacturer Taza Chocolate.
His company mainly makes bars, but also Mexican-style chocolate, chocolate-covered nuts and bark. Taza's focus on darker cocoa chocolate means Whitmore has been paying a premium for cocoa beans.
“For us, the cost of cocoa has almost tripled,” he said. “We did raise the price by nearly 15% … and we may have to raise the price again, but we are doing everything we can to continue.”
Big chocolate brands such as Nestlé, Hershey and Mondelēz make Cadbury and Milka All raised pricesalso warn of further increase this year.
David Branch, an agricultural industry analyst at Wells Fargo, said the world's cocoa supply is the worst in 60 years.
That's because most of the cocoa in the world comes from West Africa, especially the Ivory Coast and Ghana. Changing climate patterns allow farmers there to deal with extreme weather and sick trees.
"Too much moisture, then it gets too hot and too dry," Blanche said. He explained that the changing weather pressures of older cocoa trees make them more susceptible to disease.
Globally, the latest crop data show a 13% drop in yields from a year ago, Branch said, marking the third year decline.
“We are seeing progress in delivery,” he said. “But it’s a big loophole.”
Last Valentine's Day, the price of cocoa in the futures market broke 47 years of record. Since then, it has doubled.
Financial roller coasters attract many speculators trying to make money quickly, which only exacerbates the volatility.
So far, shoppers don’t seem too frustrated. Despite the higher prices, chocolate sales are still rising.
“Consumers use chocolate as a kind of indulgence they cannot do without,” Mondelēz CEO Dirk van de Put Tell investors last week.
The good news is that the market is correcting itself - just slowly.
Bakeries and other companies that don’t have to use chocolate will focus more on other flavors. Large manufacturers are pushing shoppers toward chewy, fudge or other less coincidental candy. For example, Kitkat has no chocolate dip to introduce cinnamon and Naples flavors.
Countries outside West Africa have strengthened cocoa production. For example, Ecuadorian farmers have planted new trees that will produce more cocoa in a few years, Blanche said.
"We're going to see this ease," he said. "It's not a quick fix."
Fundamentally, higher-priced cocoa means investing more money for cocoa farmers in West Africa and elsewhere to plant younger trees, strengthen larger trees and make the cocoa bean supply more sustainable.
"The price of cocoa is really responding to the long-term underinvestment in the cocoa industry," Whitmore said at Taza Chocolate. "It's a real correction...so much underinvestment because the price is too long for so long . We have paid for it now."