April 8 (Punjab Khabarnama) : Who does not like a chocolate bar after lunch and even after dinner? Probably no one. Notably, it is one of the best sweet treats that is available on the planet. Of course, ice cream aficionados will say their chocolate covered treat is even better especially as the Summer sets in. However, here is the bitter truth that will make your cravings likely disappear to an extent. Cocoa prices are skyrocketing and chocolate prices in India are set to follow. Yes, get set to pay a pretty penny to assuage your sweet tooth and if you do that as generously as you have been doing till now, your wallet will certainly not love you for it.
So, what is an average chocolate lover about to see happening? Well, starting with chocolate-maker Amul, all the way to ice-cream maker Baskin Robbins, a number of companies are eyeing hikes.
Chocolates are becoming pricier and here is the bitter truth
Cocoa is the primary ingredient in chocolates and all the other related treats like ice creams and cakes and it has seen a significant surge in prices in recent times. The ripple effect is now hitting right across the chocolate industry.
In India, Amul is reportedly looking at effecting a 10% to 20% price hike for its chocolate portfolio. This was revealed in a Times of India report by Jayen Mehta, MD at Gujarat Cooperative Milk Marketing Federation (GCMMF). It also indicated that other players like Baskin Robbins and cereal brand Kellanova are feeling the effects.
The cocoa price hike has been astronomical. According to Mehta, the rate has risen from ₹150-250 earlier to ₹800 in India. So, when will consumers be hit by the price hike. Indications that were provided hinted at the hike being implemented in a couple of months in chocolates, but for ice creams, the company may just about hold the current rates.
Ice cream-maker Baskin Robbins too may hold its rates despite seeing an increase in costs by as much as 70-80%. This was revealed by master franchise holder, Mohit Khattar, CEO, Graviss Foods. He indicated that the situation will be reassessed when the season is over.
On the other hand, ice-cream maker Havmor has taken the bold step of raising prices, but the company will try and hold on to the current pricing going forward. This was revealed by its MD, Komal Anand.
Cocoa concern
A number of factors affect the price of the commodity. Among the top-most is disruption in the production cycle due to inclement weather (including climate change), crop disease, labor costs, transportation costs and rarely, even political instability leads to supply disruption and rising prices.
Sweet surrender
Demand for chocolate has been rising among consumers globally and as more and more countries grow richer, especially in the emerging markets, the demand for cocoa has been rising, creating a huge demand-supply gap.
Quality factor
Many consumers may have noticed the fact that sometimes, their favorite treat just does not taste the same. Concern is expressed about downgrades (quality and quantity) of the content present in the product or even presence of cocoa alternatives. But considering the backlash potential, very few, if any, venture that way.
Consumer Impact
With household budgets always being tight, chocolate lovers have no choice but to do the impossible – cut down on consumption or try lower-priced alternatives.
Sweet Endings
While the future looks full of gloom for chocolate lovers, the fact that most companies are looking to absorb the cost rather than pass the hike wholly to consumers, it may actually soften the blow.