Halloween Candy Prices on the Rise Due to Cocoa Shortage
This Halloween, candy lovers may notice a spike in prices for popular Hershey and Mars chocolate bars. The cost of cocoa has doubled since the beginning of 2024, and experts predict that prices will remain high until at least September 2025, according to a report by Wells Fargo. Major candy manufacturers are also making adjustments to their products to reduce their reliance on cocoa.
The Agri-Food Institute of Wells Fargo recently published a study highlighting the record-high cocoa prices. The main cause of the increase is attributed to shifting weather patterns in West Africa, the primary cocoa-growing region. Unfavorable conditions during this year’s growing season, including a dry spell caused by the El Niño weather phenomenon and dust-carrying winds inhibiting cocoa pod growth, have led to a decline in production.
David Branch, sector manager at the Agri-Food Institute, explained that cocoa cultivation is particularly sensitive to weather conditions, making it challenging for producers to meet the rising demand for chocolate without raising prices. He noted that warehouse stocks are at their lowest levels in 50 years, with production continuously decreasing over the past 15 months. This scarcity has caused futures prices to skyrocket, reflecting the growing demand for chocolate products.
Branch pointed out that cocoa production in the Ivory Coast is projected to drop by 22.4% in 2024 compared to the previous year. As a result, chocolate manufacturers are facing tough decisions on how to manage the cost increase. While high-end chocolate brands may maintain their luxury prices, companies like Hershey, Nestlé, and Mars are exploring alternatives to mitigate the impact of expensive cocoa.
One strategy adopted by these companies is to introduce new non-chocolate candies to their product lines. For example, Hershey recently launched Shaq-A-Licious gummy candies featuring NBA star Shaquille O’Neal and a Kit Kat bar with a cinnamon toast flavor. By reducing the amount of chocolate in their products and focusing on non-chocolate offerings, these companies aim to maintain consumer interest while managing production costs.
Consumers may also notice changes in Halloween candy packaging this year, as manufacturers may opt for “shrinkflation” – reducing the quantity of treats in a bag while keeping prices constant. This cost-saving measure reflects the industry’s efforts to adapt to the challenges posed by the cocoa shortage.