Swiss chocolatiers have a battle on their hands as Easter rolls around, with surging cocoa prices sending their costs soaring and consumers cutting back as inflation hits their pockets

Swiss chocolate manufacturers are facing an uphill battle as Easter approaches, grappling with skyrocketing cocoa prices that are driving up their costs while consumers are feeling the pinch of inflation.

Cocoa prices surged past $10,000 per tonne in New York on Tuesday, marking a record high that has more than tripled compared to a year ago and more than doubled since the beginning of February. This surge is expected to compel chocolate makers to increase their prices, despite having limited flexibility to do so.

Earlier this month, Lindt & Sprungli announced plans to raise their prices again in 2024 and 2025, following a 10.1 percent average increase last year. The company is banking on its higher-margin products like pralines and chocolate Easter bunnies to absorb the impact of these price hikes.

The sharp rise in cocoa costs, coupled with already high sugar prices, poses significant challenges for the Swiss chocolate industry, according to Thomas Juch, spokesperson for Chocosuisse, the sector's employers' federation. He noted that manufacturers are unable to fully pass on these cost increases to consumers due to price adjustments occurring intermittently during negotiations with supermarket chains.

The increase in food prices in 2023 dampened consumer appetite, leading to a slight decline in Swiss chocolate export volumes and per capita annual consumption in Switzerland, which is the world's largest consumer of chocolate.

The surge in cocoa prices was driven by poor harvests in Ivory Coast and Ghana, the leading cocoa producers, caused by adverse weather conditions and a cocoa pod disease outbreak. Cocoa prices have doubled again since the end of January, putting further pressure on chocolate manufacturers.

While altering recipes is a common strategy for the food industry to mitigate rising raw material costs, Nestle CEO Mark Schneider emphasized that this approach is not feasible for chocolate products, as consumers have clear expectations for their favorite treats.

Instead, chocolate manufacturers may focus on introducing new products to adapt to changing market conditions. However, for now, many chocolatiers, including Camille Bloch, are left with no choice but to implement price increases to offset rising production costs.