Hawke’s Bay’s Silky Oak Chocolates faces price hike amid global cocoa crisis

Silky Oak Chocolates has fallen victim to the cocoa crisis and says a price increase for their chocolate treats is weeks, if not days, away.

Tucked in Waiohiki, the Hawke’s Bay icon is battling the global cocoa shortage with its cost for cocoa going up by a third.

Owner Jeanette Darwen said she could no longer hold the prices and would be forced to pass some of the additional cost on to her customers.

Darwen said the increase was caused by a drought and a disease that had killed off the cocoa trees at the plantation in Africa where she purchased her cocoa beans.

The cacao swollen shoot virus disease (CSSVD) spreads through mealy bugs that feed on cacao crops.

Jeanette Darwen said her customers would not see shrinkflation with their chocolates. Photo / Michaela Gower

When a plant gets infected, it might show symptoms including rounding and shrinking of the cacao pod, swelling at the stems and roots and red veins on immature leaves.

The rainforest tree, which cannot be grown in Hawke’s Bay, takes about five years to grow and mature before it starts to produce the pods and Darwen said the problem would be long-term.

In preparation for the increase, she decided to buy three months of cocoa supply which came in 25kg lots and was usually purchased monthly.

However, she said those supplies were “well and truly gone”.

“We have got to keep our standards up and we won’t use inferior cocoa for our chocolate.”

She said in peak chocolate-making time around Easter, they could use about 600kg of cocoa in a day

Darwen said her prices varied but individual chocolate prices could increase from around $1.50 to $2 and would be done in increments to manage the effects on customers.

“We are going to have to put through another price increase on our products and that will have an impact on the public and we apologise for that.”

She said this was not the first price increase to shock the chocolate makers as the cost of sugar used for the centres had doubled over the past two years.

Darwen said she would ensure customers would not see shrinkflation or an inferior product at her store.

“It’s better to have a little bit of quality than a whole lot of something that isn’t.”

Silky Oak Chocolates is committed to quality for the customers. Photo / Paul Taylor

She described her passion for chocolate as a “love affair” and said the collective favourite in Hawke’s Bay was the marshmallow chocolate.

“If you feel like your body is requiring chocolate, there is something in it that actually helps you.”

According to a new international report by food and agribusiness banking specialist Rabobank, skyrocketing cocoa prices are putting strong pressure on chocolate producers around the globe, who will likely pass on the burden to consumers.

In an unprecedented surge, the Soaring cocoa prices: The worst is yet to come report said, cocoa commodity prices had hit their highest levels in nearly 50 years.

RaboResearch analyst Paul Joules said the increase was fuelled by a global cocoa shortage.

“This is primarily due to a disappointing harvest in West Africa, the source of 70% of the world’s cocoa.”

To combat rising costs, Joules said chocolate manufacturers across the globe were adopting various strategies.

“These include ‘shrinkflation’, which is reducing package sizes while maintaining prices, and ‘skimpflation’, which is altering recipes to use less cocoa and more fillers,” he said.

“These tactics, while effective, are often unpopular with consumers.”

Joules said consumers were likely to alter buying habits, switching between chocolate types and brands, and potentially moving toward private labels or alternative treats.

“The increased cost of chocolate is expected to lead to a significant drop in consumer demand. This market correction should balance the cocoa supply shortage and stabilise prices.”

Michaela Gower joined Hawke’s Bay Today in 2023 and is based out of the Hastings newsroom. She covers Dannevirke and Hawke’s Bay news and loves sharing stories about farming and rural communities.