Easter eggs prices are set to come under even greater pressure as sugar and cocoa prices have jumped ahead of the holidays.
Cocoa futures prices have spiked in recent weeks due to high demand and reports of low bean arrivals, as well as worries contracts would not be fulfilled, according to commodity data analysts Mintec.
The commodity’s prices in London have increased by 7% since the start of February and have consistently gone up in the weeks leading to Easter.
World market sugar futures prices have also increased 5% by the end of February 2023, Mintec data shows.
The expected global surplus this year will be “smaller than expected” and “the market may move into deficit in 2023/24 unless the weather and macro environment remain relatively benign”, analysts said.
Additionally, shop price inflation hit a new high in March, with the British Retail Consortium warning earlier this week that prices of other sugary favourites like sweets and fizzy drinks are also on the rise ahead of Easter.
Read more: Sugar prices continue to mount after hitting 10-year high
“Companies such as Lindt are well aware of the higher cocoa beans market price, which will add to input cost inflation this year,” said Bloomberg research analyst Diana Gomes.
“The increase in cocoa costs typically takes about eight to 12 months to filter through due to hedging and stocks previously bought at lower prices. This was helpful in 2022 when sugar and milk powder, the other key chocolate ingredients, were much more expensive, so cocoa helped by slightly smoothing chocolatiers’ cost inflation.
“That said, companies are watching very carefully how their market share moves with price increases.”
Gomes warned companies were “prepared to adjust pricing strategies beyond shrinkflation techniques” – for instance, by having more variety of product in small packs on the shelf, “which can be handy for cash-squeezed consumers looking for Easter gifts”, as well as using innovation to sell products at higher price points for shoppers who can afford it.
“If the sensitivity to pricing is worse than expected – ie units sold decline too much – manufacturers may use promotions as a last resort to make sure there’s not a lot of unsold Easter product,” she added.
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