Rising cocoa prices have Chicago chocolate sellers feeling the pinch
Katherine Anne Confections in Irving Park prepares for the Easter season with a display of holiday chocolates on Thursday.
Paul Beaty/For The Sun-Times
Ahead of Easter on Sunday, exquisite chocolate treats are on display at Katherine Anne Confections in Irving Park. Chocolate eggs are filled with peanut butter praline and crispy quinoa. Chubby chocolate bunnies are stuffed with lemon ganache and vanilla bean marshmallow.
Then there are the truffles: chocolates flavored with stout-infused caramel; Michigan raspberries and champagne; coffee and cream; citrus and lemongrass; Crème de menthe liqueur and other decadent ingredients.
It’s a sweet array even though the prices have gone up. One truffle now costs $3.25 compared to $2.75 in 2019. A box of eight eggs or bunnies, new this year, sells for $32, about 20% more than what prices would have been in 2023, said owner Katherine Anne Duncan.
Chocolate makers and food businesses big and small are feeling the impact of soaring global cocoa prices — the main ingredient in chocolate — and it's also hitting consumers.
Blommer Chocolate Co. last week dropped a bombshell when it announced the closure of its iconic factory, known for wafting mouth-watering aromas across the city. High costs of running the original 1939 chocolate factory in Fulton River District were the main reason for the decision. But its parent company, Fuji Oil Holdings, also cited “skyrocketing cocoa prices” for the candymaker’s “extraordinary losses” in fiscal year 2023.
Other treat businesses are also feeling the pinch. Mindy’s Bakery in Wicker Park, 623 N. Milwaukee Ave., uses plenty of chocolate in its cookies, brownies, cakes and hot chocolate. Prices of all its chocolate products — unsweetened, milk, dark, white, cocoa powder and decorations — have increased in the last year, Mindy's executive pastry chef Bo Durham said in an emailed statement.
Global chocolate prices are poised to climb even higher. Cocoa futures have surged this year, roughly doubling since the start of 2024. Rising temperatures and weather conditions have stressed and damaged cocoa crops in West Africa, which produces more than 70% of the global cocoa supply. Sugar prices are also rising. Futures for a pound of sugar are up about 8% in 2024, after rising 2.7% in 2023.
Food companies typically respond to higher costs in different ways such as using less chocolate, substituting ingredients or even shrinking the serving size, also known as “shrinkflation.”
But at Katherine Anne Confections, “we are not reducing what chocolate we use, as high-quality chocolate is extremely important to us. But we definitely are raising prices,” Duncan said. She anticipates raising the price of a cup of drinking chocolate from $6 currently to $6.75 or even $7 in the next few months.
The cost of chocolate from her San Francisco supplier has been increasing annually by 8% to 10% for almost a decade. Katherine Anne Confections uses about two tons of fair trade chocolate each year from Guittard Chocolate Co.
Mindy’s Bakery has tried to keep prices down, Durham said, “but as a business we have to make the decision to make money and carry on. We have not changed any of our recipes but are more conscientious about our usage and to avoid waste at all cost.”
A bag of its hot chocolate mix now sells for $30, up from $20 before the pandemic at the restaurant that predated Mindy’s, Durham said.
Food giants like Chicago's Mondelēz International, which owns chocolate brands Cadbury and Milka, are also not immune to the price hikes. The company raised chocolate prices by up to 15% last year and would consider additional price increases to help meet 2024 revenue growth forecasts.
Hershey said "historic" cocoa prices would limit earnings this year, in its 2024 outlook report released last month. “Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business,” Hershey CEO Michele Buck said, during an investor call last month.
The latest report from the U.S. government’s Consumer Price Index showed the cost of candy and other sweets rose 5.8% in February compared with a year ago.
Yet, people are still consuming plenty of sweets, and the National Confectioners Association estimates sales this Easter season will surpass $5 billion. Overall, it said U.S. confectionery sales, including chocolate, candy, gum and mints, hit $48 billion in 2023 and are projected to reach $61 billion by 2028.
At Katherine Anne Confections, business is still good even though expenses are up all around, not just for chocolate. Other ingredients and supplies are also costlier due to high inflation during the pandemic. For example, compostable cups and lids used to cost 15 cents in 2019 and are now up to 50 cents, Duncan said.
The confectioner opened her first shop in Logan Square, at 2745 W. Armitage St., in 2012 and her second location last year in Irving Park, 3653 W. Irving Park Road. She said Easter sales are slower this year, though it’s unclear why.
But Duncan remains optimistic. Her customers are different than typical chocolate bar snackers. Higher prices might deter some, but “once they try our products and realize how truly delicious they are, then they’re invested,” she said.
Contributing: Associated Press
