NOVATO, CALIFORNIA - MARCH 22: Chocolate Easter candy is displayed on a shelf at a Target store on March 22, 2024 in Novato, California. Cocoa futures prices have more than doubled since the beginning of the year and hit a record high of $8,940 per ton today. The spike in price is due to a shortage of cocoa and will likely result in higher prices for chocolate products ahead of the Easter holiday. Justin Sullivan/Getty Images/AFP (Photo by JUSTIN SULLIVAN / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)
NEW YORK: Baskets overflowing with chocolate bunnies and pastel-coloured marshmallows are a holiday staple, with Americans forecast to spend more than US$5bil on candy this Easter season.
But this year, consumers will be paying more for less as cocoa costs continue to surge.
Not only are prices higher – those delectable chocolate eggs have climbed more than 10% in a year – but shoppers who are willing to pay up should also expect to get less for their money.
It’s the phenomenon of shrinkflation: when sizes shrink, but you’re paying the same price, or sometimes even more, for the same product.
Companies are dealing with an unrelenting drive higher in the cocoa market by reducing the size of their candy bars.
They’re also promoting products with less cocoa or that feature other starring flavours, like embracing treats that contain ingredients such as peanut butter or cream.
“If consumers haven’t really paid attention to chocolate prices since Christmas – or certainly since Halloween – there’ll be a little bit of a sticker shock when it comes to the prices they’re paying for chocolate products on the shelf,” said Billy Roberts, a senior economist for food and beverage at CoBank.
New York cocoa futures already closed 2023 with a 61% gain and have continued to surge since. Prices have more than doubled just this year, and hit a record US$10,080 a tonne last Tuesday.
The rally’s been driven by a historic shortage of cocoa beans from West Africa, the world’s top growing region.
The average unit price of a chocolate egg jumped 12% in the year ending March 9, while sales volumes were down 4.2% in the same period, according to data from consumer researcher NIQ.
Broader chocolate sales follow a similar trend, NIQ data showed.
Even though prices are higher, now may not be a bad time to start stockpiling some treats – especially in the week after Easter when leftover holiday goodies go on sale.
That’s because chocolate is typically manufactured well in advance.
Easter costs are already “locked in, albeit at higher cocoa cost versus last year,” said David Branch, a sector manager at Wells Fargo Agri-Food Institute. But, “the big increases will most likely come in the future” as the current “astronomical prices” kick in.
The current Easter candy on shelves from Hershey Co, for example, is planned with retailers a year in advance and isn’t impacted by current costs, said Allison Kleinfelter, a company spokesperson.
That means more bad news is probably in store for chocolate lovers during Easter 2025.
More than 40% of consumers say they prefer a solid chocolate egg over a filled or hollow one, according to the National Confectioners Association.
Still, chocolate continues to be an affordable treat for many – particularly for holidays, which account for nearly two-thirds of all US confectionery sales.
Nearly 90% of consumers are planning to buy Easter candy, making it one of the top planned purchases for the holiday, according to the National Retail Federation.
And even with higher prices, “consumers continue to embrace chocolate and candy as part of their celebrations, occasions and every day,” said Carly Schildhaus, the National Confectioners Association’s director of public affairs and communications.
Demand for the treats has often proved to be more inelastic than other non-essential goods.
After all, while no one technically needs chocolate to live, there are certainly many chocoholics who would beg to differ. —Bloomberg
