Happy Valentine's Day! U.S. chocolate prices soar as consumers continue to face inflation threats

Caixin February 14 News (Editor: Ma Lan) It’s that time of year again—Valentine’s Day. But American consumers may not find today particularly romantic, as inflation in the U.S. remains severe.

Among the most iconic Valentine’s Day gifts, the price of chocolate has increased by 14.4% year-over-year from January to February. According to the U.S. Candy Association, chocolate is the most popular candy around Valentine’s Day, accounting for about 75% of all candy sales. Additionally, the U.S. Retail Federation estimates that Americans will spend $2.6 billion on candy this Valentine’s Day.

Market intelligence firm Datasembly pointed out that the rise in chocolate prices, compared to a 7.8% increase in the same period last year and a 10.5% increase projected for 2024, represents a significant acceleration. Datasembly tracks the best prices for over 4,000 chocolate products across 57,000 stores nationwide.

The sharp increase in U.S. chocolate prices is actually related to a previous global cocoa shortage, partly due to extreme weather in major producing regions—West Africa—leading to poor harvests in recent years.

Inflation Curse West Africa produces about 70% of the world’s cocoa beans, but due to poor local harvests, cocoa futures prices soared from around $2,500 per ton in mid-2022 to over $12,600 by the end of 2024.

Although cocoa prices have now fallen back to about $4,000 per ton, the current chocolates on shelves are made from cocoa beans purchased when prices were at or near their peak, meaning chocolate prices remain high.

David Branch, Industry Manager at the Wells Fargo Agricultural and Food Research Institute, said that although demand remains relatively stable, supply has suddenly decreased, causing prices to surge. The high retail prices of chocolate are due to manufacturers purchasing cocoa months in advance and still working through their inventories.

However, Branch noted that for most American consumers, the upward trend in chocolate prices may ease around Easter (late March to late April) and fall back by Halloween (late October).

The surge in chocolate prices also highlights the severity of inflation issues in the U.S. — despite the overall inflation rate having retreated from its 40-year high in 2022, prices for some goods are still rising rapidly.

According to the latest inflation report released by the U.S. Bureau of Labor Statistics on Friday, the price of candy and chewing gum in January increased by 7.5% year-over-year, three times the overall inflation rate.