Be wary of wholesale chocolate price hikes, warns Euromonitor

By Oliver Nieburg

- Last updated on GMT

Don't hamper emerging market growth with chocolate price increases, says Euromonitor
Don't hamper emerging market growth with chocolate price increases, says Euromonitor

Related tags Chocolate Marketing Developed country Euromonitor international

Chocolate makers should ensure that wholesale price increases do not stunt growth in the emerging markets, says an analyst at Euromonitor International.

Nestlé, Hershey, Mondelēz International and Mars Chocolate North America all introduced chocolate confectionery price hikes in the first half of the year in response to rising input costs, particularly from cocoa.

Don’t hamper emerging market growth

Iman Hamidaddin, consulting analyst at Euromonitor, said in a podcast​ that chocolate manufacturers should carefully weigh up the impact of upping wholesale prices as consumers in emerging economies such as India may be put off.

“While this is unlikely to have too much of an effect for consumers in Western countries, higher prices in emerging markets such as Asia Pacific could hamper manufacturers’ efforts to penetrate these markets.”

“…When passing on rising cocoa costs manufacturers must consider the impact the higher unit prices will have on the affordability of their products,” ​she said.

Cocoa prices up 23%

Mars’ price hikes only came in North America​, but Hershey upped its wholesale prices globally​ by 8%.

Mondelēz said in its Q2 results in August that some European customers, notably in France, had rejected its price hikes.

The average daily cocoa price in September was 23% higher than the same period last year at $3,221 per MT, according to International Cocoa Association (ICCO) data.

According to Euromonitor International, cocoa accounted for 14% of manufacturing costs for a 100 g chocolate bar in May 2014, with the bulk of costs coming from processing.

Large chocolate manufacturers also tend to buy cocoa far in advance. Hershey CEO John Bilbrey said in a recent interview​ with CNBC that Hershey’s 2015 cocoa demands were already purchased and were waiting processing in its US factories. He said that Hershey would not raise wholesale chocolate prices any further this year in response to possible cocoa supply constraints due to Ebola in West Africa.

Growth strategies: India should be at the heart

Hamidaddin said in her podcast that Asia Pacific would account for a third of global value growth and half of volume growth in the confectionery market between 2014 and 2019.

She said that growth in the global confectionery would be mainly in chocolate as consumers in developed and emerging markets moved to chocolate as an affordable luxury.

“India is expected to remain the fastest growing chocolate confectionery market and given the size of its population and its market potential it should be at the heart of international confectionery players’ strategies.”

Related news

Show more


Heraeus Carbon Infra-Red Heating System Help Chocolate Manufacturer to Maintain Quality and Improve Production Reliability

Posted by Ray Baird,

A 9kW carbon infra-red heating system from Heraeus Noblelight is helping to ensure consistent chocolate quality while reducing production line down-times at OP Chocolate’s Dowlais, South Wales, factory. The system is used to pre-heat chocolate moulds prior to filling and replaces a long-established ceramic infra-red system.
OP Chocolate was originally founded in Cardiff in 1938 and production was transferred to the purpose-built site in Dowlais in 1963. The company is now a member of the French Groupe Cemoi. Its state-of-the-art, 16000 m² factory focuses on wafer and chocolate tablet manufacture, supplying all major food retailers and enjoying a thriving export trade.
The production of moulded chocolate involves depositing liquid chocolate into polycarbonate moulds. However, it is important that the moulds are pre-heated to a specific temperature before the chocolate is poured. If the moulds are too warm, the chocolate can change its characteristics and detemper. If they are too cold, the poured chocolate will lose shape and possibly crack.
Previously, OP Chocolate had used infra-red, ceramic eaters to pre-heat the moulds. A shuttering system could be placed between the heaters and the moulds in the event of line stoppage, to prevent spoiling of the chocolate in the moulds during the time it took for the heaters to cool down after switch-off. However, the ceramic system was proving unreliable in operation and the action of changing over the shuttering was proving increasingly difficult.
Having successfully installed a similar Heraeus carbon fibre infra-red mould heating system on another chocolate tablet production line five years ago, the project engineers at OP Chocolate decided replace the ceramic system with a carbon medium wave system. This proved to be one third the size of the old system. It features three, 3kW emitters and can be either manually or automatically controlled. With manual control the emitter outputs can be adjusted by the operator to achieve a mould temperature of 30ºC as measured by a pyrometer. With automatic control, the emitters are regulated automatically according to the pyrometer setting.
As Peter Smith, project manager at Dowlais, explains, “The infra-red system, which was retrofitted without any problems into the available space, provides precisely controllable heating for the moulds and their very fast response ensures that line stoppages are now more easily managed and quality improved

Report abuse

cocoa prices

Posted by joseph sampson,

my apologies,
the query should include "single estate".
therefore, what is the current rate for single estate, organic, certified, fine & flavour (floral and fruity) cocoa, in the european market and what was the rate this time last year?

Report abuse

cocoa prices

Posted by joseph sampson,

what is the current rate for certified, organic,fine and flavour, (fruity and floral) cocoa in the european market and what was the rate this time last year?

Report abuse