"Targeting the MZ Generation"... Why Chocolate Remains Expensive Even as Cocoa Prices Plunge

Decrease in Consumption Following Price Hikes

Targeting Younger Consumers Through Social Media

Although international cocoa prices have plunged 34% in the past year, chocolate prices have been slow to drop. This is because companies are choosing to strengthen their premium product lines rather than cut prices in response to accumulated cost pressures.

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"Last Year's Soaring Cost Burden Remains"... Chocolate Consumption Falls 4.4%

According to CNBC on the 27th (local time), cocoa futures, which approached a record high of $12,000 per ton at the end of last year, have now fallen to $5,327 per ton—a 34% drop compared to a year ago. While this is still high compared to the last 20 years, when cocoa was typically $2,000–$3,000 per ton, prices have recently stabilized as supply has recovered.

Nevertheless, consumer prices have not been quick to decrease. Major global chocolate companies explained that the impact of last year’s surging raw material prices continues to weigh on their performance.

Swiss chocolate company Lindt reported that, as a result of raising product prices by an average of 11.8% in the first half of this year, sales volume fell by 7.5%.

Adalbert Lechner, CEO of Lindt, said, "The unprecedented increase in cocoa prices forced the entire industry to make record price hikes." He added, "Geopolitical uncertainties, inflation, and weakened consumer confidence have also contributed independently to reduced demand." Additionally, he cited reduced visitors from the Middle East and Asia to Europe, due to the war between the United States and Israel and Iran, as another factor contributing to declining sales.

Nestle also reported that due to rising costs of cocoa and other raw materials in the first half, operating profit decreased by 2.8%. However, the company expects to see improved profitability if cocoa prices stabilize.

Barry Callebaut, the world’s largest supplier of chocolate ingredients, also stated that global chocolate consumption has declined by 4.4% compared to last year.

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Focusing on New Product Launches Over Price Cuts... Targeting Younger Consumers Through SNS Marketing

Chocolate companies are focusing on launching new products and strengthening marketing efforts rather than lowering prices.

One notable example is Lindt’s “Dubai Style Chocolate.” This product, which was launched late last year in response to the Dubai chocolate craze on social media, became extremely popular. Now, global retailers including Walmart, Trader Joe's, Shake Shack, and Harrods also carry related products.

Lindt plans to further intensify marketing efforts on social media to aggressively target younger consumers. CEO Lechner stated, "The success of Dubai Style Chocolate demonstrates just how quickly SNS can boost brand recognition and demand," adding, "It has been a great help in expanding our connection with younger consumers."

Nestle also plans to expand influencer marketing and shift its advertising focus to digital and social media platforms. CEO Philippe Nafrathil commented, "We will further digitalize our marketing and adapt it to the content consumption habits of younger generations."

This content was produced with the assistance of AI translation services.