March 29, 2024
(press release)
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Leading players in the UK chocolate industry have their eyes on the prize this Easter. However, there are many challenges to overcome, especially “eggflation”. The cost of cocoa is at an all-time high. This rise in raw material costs consequently influenced the prices of many chocolate brands in the run-up to Easter. The price rise of chocolate will impact the buying behavior of UK consumers, as many continue to be affected by the cost-of-living crisis, says GlobalData, a leading data and analytics company. Ramsey Baghdadi, Consumer Analyst at GlobalData, comments: “Other raw materials have started to lower in price; however, cocoa and sugar have seen particularly high cost increases due to unfavorable weather conditions. This adds an extra layer of challenges for chocolate manufacturers, as the decision to increase the price of their end products becomes more likely. If manufacturers decide to raise their chocolate prices, they will likely experience less sales this year, as consumers show money-saving behavior in response to the cost-of-living crisis.” A survey* conducted by GlobalData found that 1 in 10 UK consumers claimed they have stopped buying chocolate, confectionery, and dessert products because they are too expensive now. Over half (54%) of UK consumers claim that they are either switching to the store’s own chocolate, confectionery, or dessert brand or are switching to another cheaper brand. Baghdadi concludes: “An affordable pricing strategy will be a critical success factor for chocolate brands this Easter season, as more consumers consider private label offerings. Looking forward, cocoa prices are expected to impact shopping behaviors during other festive seasons such as Halloween and Christmas. A well-executed promotion partnership with retailers will ultimately leverage the revenue performance, as this closely aligns with consumer preferences. “In addition to pricing, positioning is also key for chocolate companies. Having multiple points of sale will ensure consumer engagement. A clear omnichannel strategy to target consumers online and offline will be a sink or swim moment for the chocolate industry.” *GlobalData 2023 Q4 Consumer Survey – UK, published in December 2023, sample size – 500
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