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Luxury chocolate makers increase the costs of volatile raw materials to enjoy a boom in demand, saying that some consumers react to higher prices and reduce cocoa content in mass market products by exchanging premium offers.
Cocoa prices tripled last year while the bad weather in the world’s main growth region in the world has hit crops, chocolate companies bringing the cost to customers thanks to higher prices.
The manufacturer of Hershey and Oreo, Mondelēz, both warned of profits in February, after reporting a drop in sales volumes in 2024, while the Confectionery Division of Nestlé, owner of Kitkat, reported a drop in sales last year.
However, the end of the market is more resilient, helped by the greater margins that help absorb the increase in costs. High -end confectioners also note a counter trend in the middle of the cost of living crisis, with regular consumers looking for luxury items despite the highest price.
“If a Mars bar is much more expensive than before, people think” that I could exchange as well “, said Daniele Ferrero, Director General of Venchi Privé, including the Chocoviar Premium Stracciatella Egg costs € 44 in Italy and £ 54 in the United Kingdom.
Giacomo Biviano, the chief of Domori, the Italian chocolate maker behind the Rococo and Prestat brands, said: “Even the low quality product [now has] A very high price, so the consumer will choose the best. »»
The luxury brands Neuhaus, Jeff de Bruges, Cornea Port-Royal and Arta all offered a solid growth in sales for Belgian Parents Compagnie du Bois Sauvre last year, while Läderach in Switzerland doubled the size of his business over five years, said its director general Johannes Läderach.
On the other hand, Barry Callebaut, the largest chocolate manufacturer in the world which provides most of the major confectioners in the world, reported a drop in sales volume for the first half of the last exercise, blaming the “unprecedented volatility” in the cocoa markets.
Mondelēz’s managing director, Dirk Van de Put, said this year that the company was sailing “unprecedented cocoa costs inflation” while Hershey noted in his annual report that he continued to “undergo global drops in consumer demands for our products”. Cocoa Futures exceeded a record of $ 12,000 per tonne in December, but it has since fallen below $ 8,500.
The CEO of Neuhaus, Isabel Baert, said that premium brands “which maintain their quality and know-how are better placed to resist these market conditions”.
Many traditional chocolate manufacturers have calmly reformulated recipes to protect the benefits of the costs of costs, often reducing the cocoa content and replacing it with other fats and aromas.
Andrew Moriarty, analyst at Mintec, said that it should put premium chocolateers in a “more difficult position” because their products have a higher cocoa content and “they must stick to these ratios”.
However, with luxury chocolate makers largely refusing to reduce the content of cocoa and rather increases prices, customers have mainly remained faithful.
“Even if the consumer would not know it,” said Läderach, “it would destroy the premium culture that we want to celebrate. Our profitability analysis proves that you can have chocolate from the highest standard … and get the price for this.”
Venchi’s Ferrero saw the scope of premium brands to take advantage of the problems of the wider confectionery industry if the cocoa prices were to remain unpredictable.
“For each consumer who decides to buy super premium chocolate less frequently, I hope that we will have two consumers who are negotiating mainstream chocolate with premium chocolate,” he said.
“If you bought a Mars bar, were you actually a chocolate lover anyway?” He asked. “How many chocolate do you get in a kitkat?”
Nestlé said Kitkat’s recipe had not changed, adding that the popularity of the chocolate bar had demonstrated “the continuous attraction of well -established brands that offer tasty products”. March did not respond to a request for comments.
