The worst news of the day for chocolate lovers may be that they will soon have to dig deep into their pockets to be able to afford their favourite treats.
The international price of cocoa, the essential ingredient in chocolate, is currently 65% higher than a year ago, according to the American CoBank.
It has increased by more than 31% in the past six months alone. New York cocoa futures were at a 46-year high in September due to concerns over shortages.
Production in West Africa, which supplies almost 70% of the world’s cocoa requirement, is lower than expected due to bad weather, and prices are expected to remain high for most of 2024.
In addition, international sugar prices have increased sharply over the past three years.
South African sugar prices have also increased sharply. According to Netwerk24’s inflation basket, the retail price has increased by 34% over the past year.
CoBank says chocolate brands have little choice but to charge higher prices and risk a decline in volume sales.
Consumers will still indulge
Research shows that consumers worldwide will however not easily forsake their favourite treats. They may trade down to another brand or a smaller slab, but generally feel chocolate treats are affordable.
Cash-strapped South African chocolate lovers are not about to abandon their sweet treats either.
Mondelēz International, which owns the Cadbury brand, issued its first State of Snacking report for South Africa late last year. This study is done annually in 13 different countries.
It shows that when times get tougher, South Africans are even more inclined to treat themselves to chocolate.
“In fact, it seems the difficult times may be compelling them to seek out these moments of sweet reprieve more often,” the group says. “Even though 94% of South Africans voiced their concern about inflation, 78% reported that they always find room in their budgets for snacks. This is especially true of millennials and Gen Z – both 85%.”
Arpan Sur, Mondelēz International’s senior director of marketing for sub-Saharan Africa, says that while South African consumers may be having a difficult time in the face of high inflation and load shedding, the findings indicate that they remain resilient and positive.
“Interestingly, 75% of South Africans believe it is more important than ever to enjoy moments of indulgence, and 80% say ‘chocolate is good for the soul’, with 50% reporting that they eat it weekly or more,” he adds. – moneyweb.co.zw
