FOX Business’ Madison Alworth speaks with Enjou Chocolat co-owner Mark Chinsky to discuss the impact sky-high cocoa prices have had on the chocolate industry.
Consumers with a sweet tooth will pay more for one of the most popular Valentine’s Day treats this year.
Cocoa prices skyrocketed, compared with a year ago, due to crop conditions coupled with rising manufacturing costs, leaving some businesses with no option but to increase prices for different chocolate products.
Ray Bitzel Jr., the owner of Bitzel’s Chocolate, an artisan chocolate factory in Suwanee, Georgia, has absorbed a hefty amount of the cost to keep customers. Still, the sweet treat shop had to raise prices to account for the increased costs.
“Chocolate prices from 18 months ago have basically nearly doubled,” Bitzel told FOX Business. “It’s that bad.”
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Wells Fargo Agri-Food Institute sector manager David Branch reported that the price of cocoa has more than doubled since the beginning of 2024, forcing industries that rely on the commodity to raise prices in order to remain profitable. Branch told FOX Business that “nearly all major candy manufacturers” indicated that they will have to raise their prices.
An assortment of chocolates from Bitzel’s Chocolate in Suwanee, Georgia. (Bitzel’s Chocolate)
The issue, according to Branch, is that the production of cocoa has been hammered for several years as key cocoa-producing regions in West Africa face higher-than-normal temperatures, which poses risks to crop development. The prevalence of cocoa swollen shoot virus disease (CSSVD), one of the most devastating diseases on cacao that causes significant losses, has also exacerbated production issues.
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Branch cited data from The International Cocoa Organization, which projected that global cocoa production in 2023-2024 will fall by 13.1% year over year, resulting in a projected production deficit for the third year in a row.
Since January 2023, the price of cocoa beans is up more than 355%. From January 2024 to December 2024, it surged over 143%, hitting an all-time high of $12,565 per metric ton.
Year to date, cocoa deliveries from the Ivory Coast, the world’s largest producer of the commodity, are up 76% on an annual basis. But nearby futures prices for the November 2024 contract increased 33% in London and 26% in New York. While the market has expectations of a better crop than in the previous season, it appears that supply risk and the current supply deficit are still big concerns, the Wells Fargo report said.
A chocolate made by Bitzel’s Chocolate in Suwanee, Georgia. (Bitzel’s Chocolate)
Bitzel’s biggest concern is making sure he doesn’t raise prices too much. As an artisanal chocolatier, Bitzel said he uses fine-grade cocoa, which hasn’t seen a reduction in prices.
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Right now, Bitzel estimates that raw commercial-grade chocolate is around $8 a pound and $12 a pound for white chocolate.
“Our job is just to figure out how to make a really good, quality product, and not have to charge an absolute fortune for it,” Bitzel said.
He said that there is a price point where people stop buying, and they seek alternatives to chocolate. This year, the business is seeing more customers, which Bitzel attributes in part to Valentine’s Day falling on a Friday. However, each customer is buying less than usual, he said.
