Soaring cocoa futures, sinking feeling ‘I’m waiting on tenterhooks’: local chocolatiers, specialty shops brace for supplier contract increases By: Gabrielle Piché Posted: 6:05 PM CDT Wednesday, Mar. 27, 2024

Hey there, time traveller!
This article was published 27/03/2024 (916 days ago), so information in it may no longer be current.

Note the chocolate bunny prices this Easter — the sweet treats could take a bigger bite out of your wallet next year.

As cocoa futures spike, local chocolatiers and retailers are bracing for even higher operating costs, following years of price increases.

“(I’m) 100 per cent concerned,” said Helen Staines, owner of Decadence Chocolates in Winnipeg.

Staines said she is preparing for her cocoa supplier’s new contract; the agreement will be renewed in May. The last contract change, which took place two years ago, included a price increase of roughly 20 per cent.

This year should bring a larger jump, Staines said.

Poor weather and disease have shrunk cocoa crop yields in the West Africa region. The Ivory Coast, which harvests around 40 per cent of the world’s cocoa, experienced a 30 per cent decline in production over the past year, according to Sophia Carodenuto, who researches global food systems at the University of Victoria.

As a result, cocoa futures have skyrocketed in 2024. (Futures are a way of measuring commodity prices based on contracts for potential delivery at a future date.)

On Tuesday, cocoa futures hit a record: US$10,000 per metric ton.

“(It’s) going to be a very large increase for me,” Staines said of her company’s expected new cocoa contract. “I’ll have to figure out what we’re going to do to try and not put our prices up too much, and how we can mitigate it.

“I’m waiting on tenterhooks to find out what the price is going to be.”

The Sherbrook Street shop is already grappling with higher costs of “everything,” from sugar to labour, she added.

Higher cocoa prices will likely persist for “some time” — at least a year — as the world awaits a potential return to normal production levels, said Barry Prentice, a University of Manitoba supply chain management professor.

However, “Will the prices ever return back to where they were?” he added, highlighting the grocery store staple lettuce, which experienced a price spike last year.

Cocoa is just one expense in the manufacturing of chocolate, alongside sugar, milk, packaging, transportation and other costs.

Meantime, Prentice doesn’t expect any looming price increases to be “that dramatic” for shoppers, nor does he plan to stop buying chocolate. Still, manufacturers must manage the heightened expenses, which often means raising prices for the consumer, he noted.

“Over time, this will likely smooth back out again.”

Constance Menzies has owned her St. Boniface neighbourhood shop Chocolatier Constance Popp for 17 years.

When she began business, 940 millilitres of vanilla paste cost $45. She now pays $230 for the same item, Menzies said.

The rising price of cocoa — which she, too, will experience in the coming months when her contract renews — is yet another enlarged cost to bear, she added.

“I actually almost feel like crying, it’s so expensive,” Menzies said of running a chocolate business.

She’s had periods of not paying herself to cover the bills; it’s not an uncommon practice for entrepreneurs, especially in this economy, Menzies stated.

“I actually almost feel like crying, it’s so expensive”–Constance Menzies

Chocolatier Constance Popp uses whole ingredients, which add up in price, Menzies said. She doesn’t plan to change operations, but expects to see more “chocolatey” bunnies in the future, where producers use artificial flavouring or less cocoa.

Meantime, it’s harder to compete in pricing as a small business, Menzies explained. She’s “not going anywhere,” she added.

At Chocolates on Academy Road, an employee, who asked not to be named, echoed that stance, saying large grocery chains have a grasp on consumers. As food prices rise, customers cut back on non-essential spending — like boxes of chocolate, they said.

Meantime, Anna Nabrzeska has quit stocking some chocolate products in Anna Family Store, her grocery shop off Henderson Highway.

She’s tracked increasing prices since the COVID-19 pandemic. Chocolate bars she would order for her European specialty shop have tripled in price.

“It makes no sense for us to even put them on a shelf,” Nabrzeska said, adding she’s worried higher cocoa prices will affect chocolate, cookies and other food items.

Cocoa prices are nearly 65 per cent higher than a year ago, agriculture-focused co-operative bank CoBank reported in February. The New York futures prices were at a 46-year high.

Globally, the chocolate industry is worth a reported US$115 billion in 2022, consulting company Emergen Research found.

— with files from The Canadian Press

gabrielle.piche@winnipegfreepress.com