Milka, a leading chocolate brand in Germany, is shrinking its chocolate bars due to soaring cocoa prices. Mondelez, the parent company of Milka, has decided to reduce the weight of both standard and large chocolate bars. This move aims to tackle increased costs in cocoa, energy, packaging, and transport. As a result, consumers will see a price rise of approximately 50 cents per bar.
The cocoa prices have skyrocketed, reaching a record high of $10,100 per ton due to weather-related disruptions, including droughts and floods. This surge in prices has presented significant challenges for the chocolate industry. Mondelez reported an increase in revenue from 561 million euros to 605 million euros in 2023, yet the profit margins remain unsatisfactory.
Other chocolate brands like Lindt & Sprüngli and Ritter Sport are also affected. These companies have announced price hikes to maintain financial stability. Ritter Sport, despite achieving higher sales, faces unsatisfactory earnings.
The entire chocolate sector grapples with navigating these unprecedented cost pressures without compromising product quality. The decision to reduce the size of chocolate bars while increasing prices reflects the broader industry trend of adapting to fluctuating raw material costs. This situation underscores the need for balance between maintaining competitiveness and addressing consumer expectations.
The chocolate makers' strategy to downsize products instead of compromising on quality highlights the complexity of managing rising costs. This approach aims to sustain brand integrity while acknowledging the economic realities of the global supply chain.
