7 days ago
Why chocolate is so expensive and how long it will last
If you've done a double take recently at the price of a block of chocolate, you're probably not alone.
Supermarkets are selling standard 180-gram milk chocolate blocks for about eight dollars.
Two years ago, the same chocolate blocks sold for about six dollars.
Given our almost universal obsession with the sweet treat, this can come as a bit of a shock to the system.
So why is chocolate so expensive and will the price come down again?
Cocoa, the key ingredient in chocolate, is in short supply globally. That's what's driving a spike in prices on supermarket shelves.
Paul Joules, an agricultural commodities research analyst from Rabobank in Sydney/Gadigal, says it is going to take a while for on-the-shelf chocolate prices to return to "more normal levels".
"We are seeing [cocoa] production improve a bit, but still global supplies are fairly tight," he says.
"There are really two key suppliers/countries; Ivory Coast and Ghana, both centred in West Africa.
"They had some pretty severe weather issues a year or so ago [impacting production]."
And even though the "cocoa commodity price has come down a little bit" since then, Mr Joules says the high chocolate prices won't come down at the same time, because chocolate companies often buy cocoa supplies well in advance.
"They'd hedge for about a year [in advance] to secure their volumes, so if you go back a year ago cocoa prices were still very high," he says.
"And they're probably still hedged at very, very high prices now … so they can only absorb those costs for so long."
He says this means we could actually see higher prices in the months to come.
Chocolatier Igor Van Gerwen has been making and selling chocolate at his factory at Latrobe in Lutruwita/Tasmania since 1989.
He says he is trying to remain "optimistic" about the future, despite the cocoa prices having a big impact on his business.
"Cacao prices increased fourfold last year during the month of March," he says.
"We increased pricing gradually, but we refused to pass on the full extent to our customers … [so] have absorbed the costs with reduced margins for the last 16 months."
Source: Macquarie Dictionary
Igor says he still has a very loyal customer base, but he has noticed a change in spending habits.
"People are still buying [our] products but are opting for the smaller, more cost-effective, box options."
The cocoa price increase was too much for small business owner Lauren Jordan from Kabi Kabi lands on the Sunshine Coast.
Two-and-a-half years after launching her natural cacao drinking product, she and her business partner have put production on hold.
"Two-and-a-half years ago, 15 kilos of [cacao] nibs cost $180, and if we wanted to buy it today it is $635," Lauren says.
"It just wasn't viable."
Mr Joules believes some of the bigger chocolate operators are being forced to adjust their business model and recipes.
"They certainly wouldn't want to raise prices or adjust prices, that is not something that chocolate companies like to do," he says.
"But if they've been dealing with higher costs for close to a year now, then it doesn't leave them with many options other than recipe adjustments — making those products lighter — or raising costs.
"We probably have seen a bit of that play out over the past few months."
Igor says he will not be changing his products through recipe adjustments.
"When many [larger companies] started introducing more confectionery-style products such as dipped lollies, caramel-based ingredients and chocolate biscuits, we actually launched a chunky chocolate block range, which has been enormously popular," he says.
Mr Joules says in the long term we could expect chocolate prices to "move back down on the consumer side, but it will just take quite a bit of time".
Mondelez, the parent company of Australia's Cadbury, is hopeful that over the long term, cocoa prices will trend downward.
Chief financial officer Luca Zaramella says, "I look at cocoa butter, which is what we buy the most, as opposed to cocoa powder — cocoa butter prices are already coming down for 2026."
The company, which also owns Toblerone and Oreos, says in the meantime it is responding to rising costs through price increases and diversifying its packaging.
"It means that we will offer a whole range of pack sizes … so the consumer certainly has many more options as it relates to price points."
