Increasing cocoa costs affecting Halloween treat prices
Posted October 31, 2024 6:48 am.
Last Updated October 31, 2024 7:18 am.
At a time when children and adults alike are trying to get their hands on a tasty treat, they’re being met with smaller quantities and higher prices.
Higher cocoa prices are to blame.
In a statement, Statistics Canada tells 1130 NewsRadio that prices have gone up month to month across the country.
“Prices for confectionary increased by 1.6 per cent in September compared with September 2023. Compared to August, confectionary prices increased by 1.7 per cent,” the federal agency explained.
Michael von Massow, a food economist at the University of Guelph, says this isn’t just a phenomenon in Canada — it’s happening around the world.
“Seventy per cent of our cocoa comes from Africa, and as is the case with many other products that we’re talking about getting more expensive, we’re seeing extreme weather,” he told 1130 NewsRadio. “They’ve had drought, they’ve had some flooding in some regions that’s caused too much moisture which can cause disease problems. We’ve seen a significant reduction in production in Africa.”
He points out 70 per cent of the world’s cocoa comes from Ivory Coast, Ghana, and Cameroon — 50 per cent alone from Ivory Coast and Ghana.
Von Massow says with climate change worsening, you can expect this to be the norm.
CLICK HERE TO LISTEN TO 1130 NEWSRADIO VANCOUVER LIVE!“Cocoa and coffee are the canaries in the coal mine of climate change. They’re not super resilient to changes in climate. So, we’re seeing significant reductions in production … concentrated in Africa.
“And so basic Economics 101 — when supply goes down, price goes up.”
Von Massow says plainly, it’s hard to make chocolate with anything else.
“It’s not like we can use something else to replace it in chocolate, so because it’s hard to substitute, because production is down, we’re seeing prices go up.”
There are two consequences to this, he stresses. Shrinkflation, where consumers see smaller packages of chocolate — including even the snack-sized bars you find at Halloween, and retailers will push other candies to ensure you leave the store with something.
“Gummies, hard candies, popcorn, chips — all sorts of alternatives might come into the consideration set because chocolate has gotten relatively more expensive. They don’t want to lose the sales, so they’ll have more options for those of us who are more budget-conscious. What’s important to grocers is the size of the basket.”
He adds that the price will be higher if there’s more cocoa in a product.
Von Massow points out that increased cocoa prices aren’t exclusive to just chocolate bars.
“Hot chocolate will go up, fancy chocolates — everything will go up in price. The degree to which it will go up in price will depend on the chocolate content. If you are talking about Smarties which are full of chocolate and just coated with candy, it will probably go up more than a cup of hot chocolate, which has chocolate in it, but it’s a smaller proportion of chocolate.”
He warns this could make things expensive for people during the upcoming holidays.
“As we get into gift giving at Christmas, we have a stronger connection to the people we’re giving it to. It’s not some strange kid in a witch costume at our front door who might be from the neighbourhood. Whereas if we’re giving a gift, we don’t want to be seen as cheap, so much more conscious of shrinkflation in that context.”