In 2024, the price of cocoa reached $11,000 per metric ton and could exceed $13,000. This situation has forced chocolate manufacturers to significantly raise prices, passing the higher costs onto consumers. Global demand for cocoa continues to grow at around 3% annually, leading to an unprecedented increase in prices, raising concerns about profitability in the chocolate industry.
In Mexico, chocolate prices have already been affected by this situation. Companies like Kuona offer services to help companies such as Femsa and Mondelez cope with inflation of input costs. Mondelez, in turn, has resorted to cost-saving initiatives to face the expected double-digit inflation in inputs, but according to Bloomberg, this may not be enough to mitigate the pressure on profit margins.
The possibility that U.S. tariffs on Mexican products could further affect the profitability of chocolate companies has raised concerns. Uncertainty remains as it awaits to see how costs will evolve when the grace period granted by the U.S. to Mexico in tariff terms expires.
The price of cocoa is at historically high levels, posing challenges for the global chocolate industry. Cocoa production has been affected by adverse weather conditions in West Africa, which produces about 70% of the world's cocoa. This region has experienced erratic weather patterns that have reduced production and increased the incidence of pests and diseases affecting crops.
Companies like Mondelez are anticipating a difficult period with compressed profit margins due to high costs and weak production. The implementation of specific pricing strategies, leveraging technologies such as generative artificial intelligence, is being considered to try to mitigate the impact of cocoa prices on the chocolate industry. Investors are keeping a close watch on how companies will manage these challenges and adapt their business strategies accordingly.
