Bad news for chocolate lovers on Valentine's Day


Cocoa prices continue to march higher as demand in emerging markets starts to strain global capacity.

A new forecast from the International Cocoa Organization on production suggest prices could be elevated for years.

Chocolate sellers will pass on some of their commodity costs to consumers, but face a tough pricing environment in many regions.

What to watch: Companies can use substitutes for cocoa butter, but in many cases will have to relabel products and face the risk of tarnishing their brands.

Chart: Cocoa futures

Related stocks: MDLZ, HSY, NSRGY, ADM, BYCBF

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Comments (2)
  • Brad Reese
    , contributor
    Comments (560) | Send Message
     
    You state:

     

    " Companies can use substitutes for cocoa butter, but in many cases will have to relabel products and face the risk of tarnishing their brands."

     

    Well, long ago under the command of disgraced former Hershey Chairman and CEO Rick Lenny, The Hershey Company relabeled the majority of its good candy sellers.

     

    For example, consumers will know they're eating "fake chocolate" when their Hershey label no longer says "Milk Chocolate," but instead says these 3 words and/or phrases:

     

    1. Made with Chocolate - like the Mr. Goodbar label says (previously it said Milk Chocolate).

     

    2. Chocolate Coated

     

    3. Chocolaty

     

    Again, the above are "code words" on Hershey Company product labels for "fake chocolate."

     

    You know, that waxy stuff that's made with health threatening vegetable oils.

     

    That's why the "quality" of Hershey's top brands vary so much in taste. Some of a top selling brand like Reese's will use real Milk Chocolate while other sizes, shapes, etc. of Reese's use "Fake Chocolate" i.e. vegetable oils - such as Reese's Nutrageous, Reese Sticks, etc.

     

    Sincerely,

     

    Brad Reese
    14 Feb 2014, 11:40 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    I'm not sure I understand why they can't fully pass the price increases of cocoa onto consumers.
    17 Feb 2014, 05:59 AM Reply Like
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