The candy landscape might look a little different as we head into 2024. Agricultural setbacks have made chocolate production extremely difficult, which has caused prices to increase to a point where candy makers may need to move away from the crop if they want to keep profits strong.
Even as the effects of grocery inflation start to cool, there are some commodities whose prices remain high for other reasons. During the pandemic, chocolate prices did increase, as the price of other staples did too. But people didn’t have as much of a problem paying those increased prices on chocolate because, well, let’s face it, we all needed some comfort at that time, and chocolate has long been known as a small and convenient indulgence.
Now in a post-pandemic period, the prices of sweets (chocolate) and sugar are still high, outpacing overall food inflation, per the U.S. Department of Agriculture.
As explained by Reuters, Ivory Coast and Ghana are two adjacent countries in West Africa that produce around two-thirds of the world’s entire supply of cocoa. Unfortunately, West Africa has experienced such heavy rainfall that cocoa yields are at the lowest they’ve been in decades, reports Bloomberg.
The heavy rain creates swamp-like conditions on the roads and causes the flowers to fall off the cacao trees before they can bud. Even worse, the overly wet conditions breed fungi that can cause cocoa pods to turn to black mush. This is known as black pod and has led to Ghana having its lowest output in 13 years and Ivory Coast its lowest in seven years.
At the same time that cocoa plants are struggling, there is also a sugar shortage at play. El Niño, a climatological phenomenon that periodically affects weather patterns, is largely to blame for reduced sugar crop as well.
In April, both Hershey and Mondelez, two global companies that produce sweets like Reese’s, Kit Kat, and Toblerone, acknowledged that the rising price of sugar is a challenge that has led to higher costs for consumers. Mondelez already announced in November that it would be raising prices on some products due to the both chocolate and sugar shortages, and Nestlé, another major sweets producer, said it would also be raising prices, as reported by Bloomberg.
Fox Weather reports cocoa prices have reached a 46-year high, with futures (contracts to purchase the commodity) in New York hitting $3,786 per metric ton.
With the price of sweets increasing as grocery inflation cools, consumers might soon be made to view chocolate as less of a comfort and more of a luxury. By extension, confectioners may need to take a different approach this holiday season in acknowledgement of this new reality.