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Central banks around the world say inflation is under control, but life isn’t so sweet for chocolate lovers, with the price of beloved treats like Freddo Frogs rising ever higher as confectionery companies pass on skyrocketing cocoa prices to consumers.
Mondelez-owned Cadbury Australia has doubled the price of two of its most popular chocolate products aVsceker cocoa futures doubled to record highs this year due to unstable weather and disease.
The price of a Freddo frog, first created in 1930 and one of Australia’s most enduring culinary creations, would double to A$2 (£1), the company said, citing the price of cocoa as the cause of the surge in the recommended retail price. The increase will also apply to Caramello Koalas.
“Due to the record global price of cocoa and rising input costs, we have adjusted the recommended retail price [recommended retail price] from $1 to $2, the first price change in over a decade,” Cadbury Australia said in a statement posted on social media channels on Friday.
Every year in Australia, around 90 million anthropomorphic chocolate frogs, available in a variety of flavours, are consumed.
“Cold Frogs are as Australian as Vegemite or Fosters. This will shock every true Australian, from the fighting men to the posh suburbia,” said Tim Harcourt, senior economist at the Institute for Public Policy and Governance at the University of Technology Sydney.
In the UK, Freddo frogs have become an unofficial indicator of the rising cost of living, with consumers comparing each new price increase to the 1994 relaunch price of 10p. The treat has hit 50p, but can be found at 30p in supermarkets including Sainsbury’s aVsceker aggressive discounting to win back struggling consumers.
Belgian biscuit maker Lotus Bakeries said on Friday that raw material prices and other production costs had stabilized, with the exception of cocoa.
Soaring energy prices and supply chain disruptions following Russia’s invasion of Ukraine in 2022 have pushed up prices for commodities such as grain, sugar and meat.
Prices have since returned to pre-conflict levels and central banks have signaled that global inflation is under control. The Bank of England and the European Central Bank have cut interest rates, while the Federal Reserve is expected to lower rates in September.
However, unstable weather conditions and, in some cases, trade tariffs have pushed up the prices of some commodities, despite the decline in core food inflation.
Cocoa futures in New York and London have hit record highs this year, with prices in New York topping $12,000 a tonne in April, as bad weather and disease devastated crops in Ghana and Ivory Coast, where two-thirds of the world’s cocoa beans are grown.
Chocolate makers including Mondelez, Nestlé, Lindt and Hershey have felt the price increases.
Hershey cut its full-year profit forecast for second-quarter earnings last week aVsceker reporting a 17 percent drop in sales. The company has raised prices as cocoa prices have recovered, but inflation-hit consumers have cut back on the chocolate treats as a result.
In July, Cadbury’s owner, snack giant Mondelez, missed second-quarter revenue expectations as consumers switched to cheaper snacks. Chief Executive Dirk Van de Put said consumers were still buying chocolate. “Chocolate remains a great category. It continues to grow with resilient volumes and despite rising prices,” he said.
Swiss chocolatier Lindt also continued to raise prices without much effect on demand. Chocolate sales volume in the first half of the year remained flat, but revenues rose 7 percent and margins hit a record 13.5 percent.
Better weather in West Africa in recent weeks has raised hopes of a supply recovery, causing prices to collapse. Cocoa traded in New York has fallen below $7,000 a tonne this week, although that is still about double the price at the same time last year.
With the disease spreading through Ghana’s cocoa-growing regions, some in the industry fear that hopes for a recovery in global supplies are overblown. Another year of shortages would compound the problems faced by chocolate makers.
Commodity prices are passed on to consumers with a time lag because companies like Mondelez purchase cocoa up to a year in advance, rather than on the spot market. Price drops are therefore not reflected in supermarket prices until the following year.
