Watch out sweet tooths: Cocoa butter costs rising
BY MICHAEL LANSU Staff Reporter September 22, 2013 2:44PM
Toffee from Terry's Toffee | Sun-Times files
Updated: October 24, 2013 6:29AM
That sweet tooth may cost you a little more this holiday season could — and we’re not just talking about that trip to the dentist.
A recent surge in the price of cocoa beans, a primary ingredient in chocolate, could have chocolate lovers digging deeper into their wallets for Halloween, Christmas and other winter holidays — and smaller, specialty producers could be especially hard hit, experts say.
“The demand for cocoa butter from China and emerging markets is through the roof, giving cocoa butter producers pricing power,” said R.J. Towner, Director of Equity Research for Valuentum Securities, Inc. “Small players that don’t have the scale of Hershey’s or Cadbury will be forced to raise prices because cocoa butter is such a large input into chocolate.”
Purchasing chocolate in advance could help smaller businesses deal with rising costs.
In Chicago, Terry Opalek of Terry’s Toffee at 1117 W. Grand, said its typical to stockpile chocolate before the holiday season, when he does 40 to 60 percent of his business. Because his product has a shelf-life of six months, he is already making chocolate-covered toffee for the holiday season.
Other candymakers still in need of chocolate could be harder hit if prices continue to rise. Other boutique stores, as well as larger chocolate producers like Chicago-based Blommer and Mars Inc. declined to comment on potential price increases.
Bill Baruch, of iiTrader, said the recent increase is not unusual, but bears watching as prices continue to climb.
“There have been some previous spikes. This is big, but not really anything completely out of the ordinary,” Baruch said.
Opalek said he has faced increased cocoa and sugar costs in the past, and avoided raising prices the past five years. Some other local shops were unable to do so.
If he has to raise prices - it will be because of other costs, not because chocolate is going up.
And Opalek says he’s not changing his recipes or production schedule as a result of rising costs.
“We have been through this in the past,” Opalek said. “Our toffee is all covered in chocolate . . . each piece is enrobed in chocolate, and is very chocolaty and rich, so we would never change that.
“Let me see it in black and white before I go crazy. What are we going to do? I have to make a product?”