World: KitKat maker sees chocolate demand ebbing as cocoa costs creep in

Published 2024년 6월 19일

Tridge summary

Consumers are expected to cut back on chocolate consumption as cocoa prices have surged due to a global shortage, prompting manufacturers like Nestle to raise prices. Cocoa futures have more than doubled this year, and while companies have hedged supplies at lower prices, they will eventually need to pass on the higher costs to consumers. Nestle's managing director, Mark Davies, foresees a decline in demand as prices rise. The supply crunch has already led some chocolatiers to increase prices or reduce bar sizes, and the industry may turn to more cocoa substitutes. Additionally, Nestle is expanding a program to support African cocoa farmers.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

(June 19): Consumers will probably cut back on chocolate as this year’s historic cocoa rally gradually trickles down to manufacturers and forces them to raise prices, a Nestle SA executive warned. Cocoa futures have more than doubled this year on the back of a huge global shortage, making it more expensive to produce confectionery. But shoppers are yet to feel the full impact because chocolatiers secured and hedged supplies at lower prices — and companies will inevitably have to start passing on higher costs, said Mark Davies, managing director at Nestlé Confectionery UK & Ireland. “Demand appears to be resilient at the moment, but as prices go up we would expect to see dampening demand,” he said during a visit of the company’s factory in York, England, which churns out 200,000 KitKat bars every hour. Cocoa futures surged to a record of more than US$11,000 (RM51,787) a ton in New York in April as poor harvests in West Africa curbed output, stressing buyers. Companies that secured ...

Source: Theedgemarkets