Rising Cocoa Prices Expected to Affect Easter Chocolate Sales

A Chocolate Bunny in an Easter basket. (iStock/bhofack2)

The price of cocoa has been on the rise, meaning that Easter treats are likely cost more this year.

At the beginning of March, cocoa prices were US$6,125 per tonne, according to the International Cocoa Organization (ICCO). By March 26, the price had jumped to $9,361.

The rise in prices is due to poor harvests in producing countries, like the Ivory Coast and Ghana, which has caused supply shortages. Crops were also damaged due to heavy rains and crop disease, according to Trading Economics.

In Ivory Coast and Ghana, the two largest cocoa producers, the harvest is expected to drop by as much as 33 percent and 50 percent, respectively.

Moreover, sugar prices have increased about 7 percent, and a Reuters poll says that number could rise to nearly 20 percent by the end of the year.

Sales of Easter treats are expected to reach about $5.4 billion in the United States alone. While a cocoa shortage may mean an increase in prices as demand rises for the upcoming holiday weekend, some chocolatiers have been marketing non-chocolate treats.

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Hershey has been promoting its new six-pack of cookies n’ cream bunnies to try to make some seasonal profits, Reuters reported. The company is also offering Kit Kat lemon crisp bars and adding Haribo gummy bears and chocolate bars in assortment bags.

However, a spokesperson said the move was not in connection to rising cocoa prices.

In Canada, about 293 million kilograms of chocolate are consumed each year, or 7.7 kilograms per person. That number is expected to reach 9.7 kilograms per person by 2028.

In 2023, the volume of chocolate and candy sold for non-seasonal occasions dropped by 3.6 percent compared with 2022, according to the Reuters report.  The amount of chocolate and candy sold for seasonal occasions increased slightly by 0.1 percent.

In February, Hershey announced a restructuring plan in light of a drop in revenue that is expected to result in a $300 million pre-tax savings.

It’s not the only candy company facing changes. Mondelez International said it will consider price hikes on chocolate items, as well as “changing the unit weights.”

“We’ve had a couple of years now of strong price increases in chocolate and you tend to find in the first year, the elasticity is okay, in the second year it gets worse, and now we’re in a third year, it’s going to be awful,” said Jon Cox, an analyst at Kepler Cheuvreux, a European financial services company.