Nestlé Confectionery UK & Ireland managing director, Mark Davies warned that there will be a potential drop in chocolate consumption as cocoa costs surge globally, in a report by Bloomberg.

During a visit to Nestlé's York factory, Davies acknowledged consumer resilience but cautioned that rising prices could dampen demand. Cocoa futures doubled this year due to a severe global shortage and reached over $11,000 per ton in April, already driven by West Africa's "poor" harvests.

While Nestlé has planned initial measures to secure cocoa supplies at lower prices, they expect that as cocoa costs continue to rise, they will eventually need to increase the prices of their chocolate products. Per VCPost, this price increase could result in lower demand for chocolate from consumers who may choose to buy less or switch to other alternatives due to higher prices.

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Cocoa Industry as Cocoa Price Surges

Similar to Nestlé's proposed plans, due to ongoing high cocoa prices, some companies in the cocoa industry are responding by raising the prices of their chocolate products or adjusting the sizes of their chocolate bars to manage costs. 

Despite these challenges, Nestlé is dedicated to sustainable sourcing practices. They plan to help 160,000 cocoa-farming families increase their income by 2030 through partnerships with African plantations to improve livelihoods in the cocoa-farming communities.

For now, Yahoo Finance reported that cocoa futures closed at £6,473 ($8,241) per ton in London on Wednesday, June 19, while Nestlé prepares for potential market adjustments amid ongoing supply challenges and consumer price sensitivity.

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