Friday, 18 October 2013

Choccie chop - the price of your chocolate fix

Here's an issue close to a lot of us. Chocolate. To be specific, the price of it. The cost of a 100g chocolate bar has risen 28% in the last year, even though cocoa powder and white sugar prices have dropped massively. Why? About a quarter of every bar is made from cocoa butter. Bad weather and social tensions in the Ivory Coast and Ghana, which combined produce just under half of the world's cocoa beans, points towards a bad harvest this year. On top of that rising demand from China, South America and Russia and pushing up demand. Europeans still eat the most chocolate though. The top 5 (Ireland, Germany, Belgium, Switzerland & the UK), eat on average 11.7kg of it per year (1.7 stone to us Brits, 24.7 lb to you American readers). Surprisingly, well surprising to me anyway, Americans only eat about half of that on average. Anyway, with less being invested in cocoa farms and more being demanded every year, it looks like the cost of producing a chocolate bar could increase massively in the next few years. According to CNBC, we may have a shortage on our hands within the decade.

This will have a big impact on the big producers. Here are the publicly traded top 5 companies 

Mars Inc. is no.1, but apparently privately owned. 
  • MDLZ   $15.5m sales    no.2
  • GRBMF   $14.1m sales     no.3
  • NSRGF (Nestle)      $12.8m sales   no.4
  • 2269:JP    (Meiji)     $12.4m sales   no.5
  • HSY     (Hershey)    $6.4m  sales    no.6
These companies will have to raise price and risk losing sales; keep prices the same and cut profit per bar or fill bars with cheaper ingredients like palm oil, veg fat, nuts and raisins. Doesn't sound good to me!

No comments:

Post a Comment