The Cost of Chocolate.
Why do chocolates seem to be costing more all of a sudden?
It's not really news that things are costing more recently, and at an increasing rate too. Our chocolate boxes are obviously not immune to this increase due to inflation and other macro eccconomic forces beyond our control. But chocolate lovers may have to brace themselves doubly for what is to come.
The short summary is that the cost of chocolate has gone up. The long answer is that the price of Cocoa has risen at an unprecedented rate to unprecedented levels.
I know, everyone overuses the word unprecedented - but you can see from the graph above that it really is. For the last 10 years (or longer) cocoa has remained a fairly unremarkable investment. With some variability but ultimately high stability in terms of price. Since late 2023, this shot up to $5k - $6k per tonne (This was considered unusually high). The price has since doubled - topping $12k per tonne briefly! There are many factors at play - but essentially it has been driven by a world shortage. Environmental factors have led to low yields from harvests. International political factors have added challenges and associated costs to farmers.
Additionally, investors have seized the trading opportunity and this subsequent boom has further accelerated the rise in the commodity price. Irritating though these market forces are in the short term - they are also some of what will correct the issue in the long term. If cocoa is so valuable then there is increased incentive to invest in producing it to meet the available demand. However, this won't be anytime soon. We're talking seasons (and thus years), rather than months.
Is the price of my chocolates going to double too!?
No. Though everyone is going to have to get used to the price of chocolate related products, of all qualities and price points, increasing - the reality isn't that bad. Ingredients are just one factor that contributes to the end retail cost of the products we make. Plant and machinery, operation cost (utilities), labour, packaging, and logistics all factor in.
We have always resisted passing on cost increases to our customers if we can help it at all. We have gone to great lengths over the years to run a lean business, increase our process efficiency, eliminate / reduce / combine different elements of packaging, and seek the best deals logistically. Due to increases in packaging, distribution, utilities and now our main ingredient - we have had to increase our prices.
Quality vs Price
It is easy to forget that the current cost of living crisis is also a cost of business crisis. Base costs of a premises have risen due to inflation. Utilities have risen significantly due to economic and political factors. These are all contributing to all artisan business asking themselves the hard question of 'where specifically does the value lie' for their customers.
We have always found that our customers come to us due to the quality of the ingredients, my highly skilled chocolatier wife's craftsmanship, and the presentation of our boxes. With that in mind we chose to resist changing to a cheaper chocolate couverture in an effort to maintain the same price point, as this would compromise the primary value of our chocolates - their taste.
Also; we definitely didn't want to go down the 'shrinkflation' route. ie: slowly, and sneakily, selling less and less for more and more!
Advice for artisans
We know that many great artisan business are also in the same boat. Having to navigate a changing a volatile economic landscape with rising costs and fragile supply chains. If we can offer anything by way of encouragement - hang in there!
Artisan food is great. The craftsmanship and connection with the food is worth preserving. If you are a customer and you agree with this - try and support local artisans where you can.
It's important that we don't all end up with only processed rubbish to chose from. #EndofRant
If you are an artisan food maker, consider:
- Analyse your business. Look for what gives greatest profitability and focus efforts on this. Assess different routes to market (what are the best ways to sell your products?).
- Leverage your skill. With an input of high levels of craftsmanship, smaller amount of ingredients can be turned into a more valuable item. Don't waste chocolate on products that don't add significant value to the chocolate being used.
- Look for efficiency at every stage you can. Techniques, processes, time and motion.
- Refine or eliminate packaging where possible.
Chocolates for sharing
Our brand tagline 'Chocolates for Sharing' has always been trying to capture the idea that chocolate is a celebration food item. An affordable luxury. Best enjoyed communally. In part we were reacting to the prevailing advertising flavour recently that encourages you to selfishly 'indulge yourself'.
If chocolate is to go up in price for a while - perhaps this will increase the feeling of celebration and preciousness associated with it. We'll all start savouring every mouthful. Which may be no bad thing.
