As Easter approaches, chocolate retailers in Chicago are bracing themselves against the hard-hitting reality of soaring cocoa prices, which have spiked to historic levels this year. Chicago’s own Katherine Anne Confections, a local chocolatier, is among those who have felt the sting, with their truffles now retailing at $3.25 each - a jump from $2.75 in 2019. The chocolate purveyor has also introduced a box of eight eggs or bunnies priced at $32, marking up nearly 20% compared to prices in 2023, owner Katherine Anne Duncan confirmed to The Sun-Times.
Further illustrating the strain, the closure of Blommer Chocolate Co.’s iconic Chicago factory was announced last week, with Fuji Oil Holdings, it's parent company, blaming “skyrocketing cocoa prices” for the plant’s “extraordinary losses” in the fiscal year 2023. Major food companies like Mondelēz International, and chocolate heavyweight Hershey have signaled that they might lean on price hikes to counterbalance their financial pressures. Hershey CEO Michele Buck revealed during an investor call, chronicled by The Sun-Times, "Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business."
The surge in cocoa prices can be traced back to rising temperatures and unfavorable weather conditions wreaking havoc on cocoa crops in West Africa - responsible for over 70% of the world's supply. As if matters were not already precarious, recent reports by Bloomberg highlighted concerns that Ivory Coast and Ghana's cacao production might be entering a period of structural decline, potentially calling for a long-term shortage scenario.
On the trading floors, the frenzy has been palpable; cocoa futures have seen a relentless upswing, approximately doubling since the beginning of 2024. The cocoa market's tumult saw companies like Switzerland's Barry Callebaut AG and Acomo NV's Tradin Organic impacted by an "unprecedented increase in cocoa prices," as per statements featured in a Bloomberg article. This volatility is compared to last year’s energy crisis and nickel-type meltdown, hinting at potential company failures if the situation deteriorates.
Despite rising costs, committed chocolatiers like Duncan vow not to compromise on the quality of their chocolate, "We are not reducing what chocolate we use, as high-quality chocolate is extremely important to us. But we definitely are raising prices," she told The Sun-Times. Consumers, meanwhile, seem to be bearing the brunt of the industry's woes with the cost of sweets climbing 5.8% in February compared with a year prior. Still, the insatiable appetite for sweets persists; the National Confectioners Association estimates Easter season sales surpass $5 billion.
