Mark Davies, managing director at Nestlé Confectionery UK & Ireland, has issued a stark warning to chocolate lovers: while secured and hedged supplies of cocoa beans have kept KitKat bar prices relatively low amid the cocoa price storm, the full impact is about to be felt as candy bar prices will be hiked.
"Demand appears to be resilient at the moment, but as prices go up, we would expect to see dampening demand," Davies said during a visit to the company's factory in York, England, which Bloomberg quoted. The York plant produces more than 200k KitKat bars every hour.
Cocoa futures in New York have once again crossed the $10k a ton mark, a clear indication of the persistent fears of dwindling global bean supplies. The situation in West Africa, the location of the world's top cocoa farms, continues to deteriorate.
Here are our latest bean reports:
Cocoa Bull Pierre Andurand Warns Of 'Price Explosion' If Stock-To-Grinding Ratio Collapses
Global Cocoa Shortage Much Worse Than Previously Forecasted As Prices Surge
Cocoa Mess: Ivory Coast Bans Some Bean Sales As Global Supplies Tighten Further
Rollercoaster: Cocoa Prices Surge Above $10,000 A Ton As Global Supply Fears Worsen
Bloomberg Intelligence stated earlier this year that chocolate makers who secured supplies well in advance or hedged at some capacity soon face higher costs.
Nestle's Davies said the rise in cocoa costs may force some companies to use more substitutes for cocoa.
In other words, food inflation will remain sticky, and price hikes are imminent in the candy world. This may be a good thing as an increasing number of Americans inject themselves with big pharma's Ozempic and dial back their carb intake.
