WASHINGTON–Ginger Park, co-owner of Chocolate Chocolate, greets many of her customers with the same question, “Are you getting the usual?”
After being in business for more than 30 years, Park sees many familiar faces every week.
“Over the years we’ve kind of had the nickname as ‘the pharmacy,’ the chocolate pharmacy,” Park said.
But it may not be just the feel good chocolate reaction or warm greeting that keep the customers coming back. It’s a benefit customers don’t know about.
Recently, Park has been paying her chocolate vendors about 10 percent more for her chocolate shipments due to a spike in the cost of cocoa on the world market.
But customers aren’t aware of the change because Park has been absorbing the added costs herself.
“We don’t like to pass that kind of hike in prices onto them [the customers], we haven’t done it yet and we’re hoping we don’t have to,” Park said. “It definitely cuts into our profit, but we love our customers so much we don’t want to go there, not yet anyway.”
Park said her vendors had been warning her for some time that cocoa prices were likely to rise.
In June, the price of cocoa hit a three-year high as demand in Asia continued to grow.
Middle classes with more disposable income in countries such as China and India are growing and are requesting chocolate, according to Michael Segal of the International Cocoa Organization.
But unlike shop owner Ginger Park, major chocolate manufacturer Hershey Co., will be asking people to dig a little deeper into their pockets to satisfy their chocolate craving.
Next month, the Pennsylvania-based Hershey Company– the number one candy producer in the U.S – will raise the price of its chocolate products by 8 percent.
“Over the last year key input costs have been volatile and remain at levels that are above historical averages,” Michele G. Buck, President of the North American sector of Hershey Co. said in a statement. “Commodity spot prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year.”
But the question is—when will the higher costs and prices stop?
That’s hard to predict, says Susan Smith, senior vice president of Strategic Communication for the National Confectioners Association.
“There is a lot of effort going into helping cocoa farmers increase supply, but with millions of cocoa farmers around the world growing cocoa on very small farms accurate forecasts are a difficult thing to come by,” Smith said.
Michael Segal of the cocoa organization guesses the cost problems in the global market could continue for five years even as demand for chocolate keeps rising.
Ginger Park of Chocolate Chocolate hopes she can keep shielding her customers from those costs and they’ll eventually smooth out.
“We call them little speed bumps,” Park said.
Published in conjunction with 