**London**: Major chocolate brands are grappling with historic cocoa price surges reaching $10,000 per metric ton in 2024. Amidst supply chain challenges and inflationary pressures, companies are forming strategic supplier relations and diversifying sources to maintain market competitiveness and meet consumer demand.
Chocolate brands are facing significant challenges due to unprecedented rises in cocoa prices, which have reached a historic high in 2024, surpassing rates not seen since 1977. The price of cacao beans has soared from approximately $3,000 per metric ton last year to a staggering $10,000, causing considerable strain on both established and emerging chocolate companies.
Much of the volatility in cocoa prices can be attributed to inconsistent weather patterns that affect growing regions primarily in Africa and South America. As a result, smaller chocolate brands, which often have less negotiating power with suppliers, are finding it increasingly difficult to manage their operations under these economic pressures. Speaking to Modern Retail, Carly Schildhaus, director of public affairs and communications at the National Confectioners Association, highlighted that confectionery sales, although still healthy, are being affected by consumers’ inflationary concerns. In 2024, chocolate sales alone contributed $28.1 billion to the confectionery sector, up from $25.9 billion the previous year, indicating a robust demand despite the challenging market conditions.
In response to the rising costs, some chocolate brands are adopting strategic measures to mitigate the impact. Jean Thompson, founder of Maeve (formerly Seattle Chocolate), noted that the company has been deepening relationships with its suppliers to ensure the quality and availability of its ingredients. Over the last two years, Maeve has sourced cacao beans directly from farmers in regions such as the Dominican Republic, Peru, and Ghana, moving away from solely relying on a Belgian supplier for its chocolate. This diversification aims to protect Maeve against potential supply chain disruptions caused by climate issues or disease.
Thompson emphasized the importance of community support, mentioning a collaborative initiative with an NGO called Rikolto, where Maeve contributes 10% of its net profits back to the local cocoa co-op, Three Mountains Cocoa. This funding is used for projects such as installing fresh water wells and developing seedling nurseries, which help ensure the sustainability of both the farmers and the supply chain.
Other companies are also leveraging creativity to manage the financial upsurge in cocoa prices. Colin Flood, Vice President of Digital Marketing at Unreal Snacks, acknowledged that their brand does not compromise on the quality of ingredients, particularly by avoiding fillers. Instead, Unreal is expanding its product line to include offerings such as chocolate-covered coconut bars and chocolate-dipped pretzels, which require less chocolate while still appealing to health- and budget-conscious consumers.
Emerging brands are navigating this climate with caution. Lindsay Hancock, founder of My Better Batch, mentioned launching her brand shortly before cocoa prices surged. With limited negotiating power and increased production costs, Hancock has had to make strategic decisions, such as ordering packaging in larger volumes to save costs.
The necessity of fostering strong relationships along the supply chain has become critical for these brands. Hancock stated, “We work closely with our co-manufacturer to ensure we’re making smart decisions around production size and efficiency.” By building these partnerships, companies are attempting to navigate the complexities of pricing and production challenges more effectively.
While the outlook for cocoa prices remains uncertain, many chocolate brands are focused on finding operational efficiencies and forging strong supplier connections to stabilise their futures in a competitive market. The ongoing rise in chocolate sales further underscores the resilience of the sector, as businesses continue to adapt and innovate in response to pressing economic circumstances.
Source: Noah Wire Services
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