The price drop is effective from 1 October 2022, although the Dutch ethical brand said, “pricing always remains at the sole discretion of the retailer”.
The recent impact on market dynamics caused by the war in Ukraine and steep rise in inflation has seen big cost increases for food brands, and Tony’s Chocolonely expects to see the cost of its goods increase by 11% year on year.
“However, Tony’s is not your typical chocolate company. In this climate of cost price increases, the brand has decided to reduce prices instead to grow the brand more quickly,” it said in a statement
According to figures from the Office of National Statistics (ONS), food prices have risen at the fastest rate since August 2008. Food and non-alcoholic beverage prices rose by 13.1% in the 12 months to August 2022, up from 12.7% in July. The annual rate for this category was minus 0.6% in July 2021 but it has since risen for 13 consecutive months. Overall, the figures showed inflation fell to 9.9% from July’s 10.1%.
Fraser McKevitt, head of retail and consumer insight at Kantar, told foodmanufacture.co.uk: “It seems there’s no end in sight to grocery inflation as the rate at which food and drink prices are increasing continues to accelerate. Now standing at 12.4% for August, the latest figure means that the average annual grocery bill will go from £4,610 to £5,181 if consumers don’t make changes to what they buy and how they shop to cut costs. That’s an extra £571 a year. Categories like milk, butter and dog food are jumping up especially quickly at 31%, 25% and 29% respectively.”
Tony’s Chocolonely’s mission is to make ‘all chocolate 100% slave free’ and said selling chocolate and generating revenue and profit is a means to that goal. It also believes that this choice should aim to shine a light on “the massive profits that the big chocolate giants make while the farmers become poorer. There’s more than enough money in the cocoa value chain, it’s just going to the wrong people.”
The faster the company grows, it said, the more cocoa Tony’s will need to buy and the more cocoa farmers that will be positively impacted.
The move to reduce prices in the UK has been backed by major retail partners who have supported more distribution, helping to offset some of the gross margin reduction in Tony’s P&L in absolute terms, it said.
