Chocolate lovers forced to pay more for less as cocoa costs soar

Australians are paying more for chocolate – and getting smaller servings – as the industry reels from soaring cocoa bean costs, which have prompted Cadbury to double the price of its Freddo Frogs and Caramello Koalas.

Strong global demand for chocolate and smaller crops, caused by unconducive weather conditions, ageing trees and crop disease, have been blamed for record cocoa bean prices this year.

Leanne and Ian Neeland, founders of Yarra Valley Chocolaterie & Ice Creamery.

“We want chocolate forever, and now it’s under threat,” said Ian Neeland, co-founder of three chocolate factories and ice creameries in the Yarra Valley, Mornington Peninsula and Great Ocean Road.

Haigh’s Chocolates chief operating officer Peter Millard said it had increased prices because of the rising costs of cocoa, other ingredients and labour, but consumer demand remained steady.

“Haigh’s expects the recent incredibly high spot pricing is a short peak, but may result in long-term pricing higher than has been the case over the last decade.”

Troy Wainwright said his Sunshine Coast business, Maleny Chocolate Co, had been hit by three price rises over the past two months. “I think these prices are going to continue, and it’s re-educating everybody that this is the new norm,” he said.

Wainwright said consumers were noticing shrinkflation – when package sizes are reduced but prices stay the same – as well as rising prices across the sector.

“They’re looking at it [prices] going, ‘Holy heck. This used to be this, and now it’s that’.”

Soaring cocoa prices have shaken Australia’s $5.5 billion chocolate industry, which is led by Cadbury-owner Mondelez, Mars Wrigley and Nestle, according to researchers IBIS.

Cadbury blamed soaring cocoa prices for its decision to increase the recommended retail price of its Freddo Frog and Caramello Koalas to $2.

Rival Nestle, which sells Australia’s best-selling chocolate bar, KitKat, said it was “working hard to keep prices as low as possible” in the face of inflationary pressures.

“Ultimately, the price at which retailers sell our products to consumers at the shelf is at their discretion,” Nestle said.

Retailers say customers are sensitive to confectionary prices given broader cost-of-living pressures, and that they are working with suppliers to minimise price rises.

The inaugural Australian Chocolate Festival was held in Melbourne last month.Credit: Luis Enrique Ascui

“While retail prices can change due to increases in commodity and raw material costs, such as cocoa in this case, we review all cost increase requests on a case-by-case basis to ensure we manage market pressures accordingly and support our suppliers, while also providing competitive prices for our customers,” said Coles.

Aldi acknowledged the rise in cocoa prices and said it worked with “business partners to deliver the best value and highest quality products to Aussie shoppers.”

Ian and Leanne Neeland say the surging cost of cocoa will threaten the future of their chocolate factories and ice creameries.

“Two of the businesses will be under serious threat,” said Leanne, managing director of Chocolate Destinations Group.

The business buys cocoa six to 12 months in advance, but must buy soon from the red-hot commodities market to maintain supply for 2025.

“End of December, we’re going to run out of chocolate, so it’s where we just have to [bear the] brunt [of] it and buy at double the price,” Leanne said.

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