In the realm of chocolates and ice creams, a harsh reality is becoming evident: the skyrocketing prices of cocoa are starting to affect the profits of major industry players. Not just traditional chocolate manufacturers like Amul, but also leading ice cream brands such as Baskin Robbins and Havmor, are facing challenges due to the increased cocoa expenses.
Amul, a major player in the chocolate industry, is considering a substantial price increase for its chocolate products. Jayen Mehta, the Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), the parent organization of Amul, highlighted that the price of cocoa beans in India has surged to INR 800 per kg, up from its earlier range of INR 150-250. Mehta stressed the necessity of transferring this cost increase to consumers, anticipating a rise of 10-20% in chocolate prices over the next two months.
Given the challenges of tweaking prices for seasonal commodities, Amul intends to maintain the same rates for its ice creams and beverages in spite of the upcoming price hike for chocolates. Mehta expressed assurance in the competitiveness of their offerings, implying that the impact on market share would be minimal.
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Similarly, the rising cost of cocoa is exerting pressure on Baskin Robbins, a well-known American ice cream brand in India. Prices for components containing cocoa have increased by 70–80%, according to Mohit Khattar, CEO of Graviss Foods, the master franchise operator of Baskin Robbins in India. However, the business has decided to absorb these additional expenses for the time being in order to prevent a sudden increase in consumer pricing. Remaining optimistic about sales performance, Khattar proposed that they reassess the issue after the summer season.
Havmor Ice Cream, which had previously revised its prices earlier in the year to counter inflation, is also devising strategies to lessen the effects of the cocoa price increases. Komal Anand, the Managing Director of Havmor, emphasized the ice cream market’s sensitivity to price adjustments. Anand disclosed that the company had taken proactive measures by securing long-term pricing contracts in anticipation of these challenges, with the goal of sustaining current price levels despite the rise in cocoa costs.
As cocoa prices persistently rise, chocolate and ice cream brands are treading carefully to balance profitability with preserving consumer loyalty. The choices made by industry frontrunners such as Amul, Baskin Robbins, and Havmor are expected to influence pricing trends in the upcoming months, affecting consumer preferences in the chocolate and ice cream sections.
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