Shrinkflation Hits Easter Chocolate Industry

Chocolate Easter eggs | Image by chandlervid85/Freepik

Consumers are expected to spend near-record amounts on the Easter holiday, but many shoppers are noticing smaller chocolate eggs and higher prices.

The term “shrinkflation” refers to products that are being reduced in size by manufacturers while prices continue to climb.

Easter is the third-highest-grossing holiday for chocolate sales behind the winter holidays and Halloween, according to the National Confectioners Association (NCA).

The NCA reported that 2023 Easter confectionary sales hit a record of $5.4 billion, a 9.4% increase over 2022. The four highest-selling holidays all saw increases in sales. The confectionery industry brought in $48.8 billion in 2023, with chocolate accounting for more than half of sales ($25.9 billion).

Multiple factors are driving prices up, including crop diseases, weather, and political turmoil, reported CNN. Cocoa futures have doubled in the past year, while costs of sugar and labor have also increased, according to CNN.

Among the causes of rising costs is an outbreak of black spot disease that affects cocoa pods in West Africa which produces 60% of the world’s cocoa. Growers say that climate change is also causing unpredictable weather patterns including excessive rain and drought that impact harvests.

“In the cocoa sector, predictions for this upcoming season are again for a supply deficit, larger than the previous two combined,” Kristy Leissle, founder and CEO of African Cocoa Marketplace, told The CEO Magazine. “While a high price seems like good news for farmers – and of course it can be – it’s because supply is threatened, which means ultimately farmers have less cocoa to sell. The impact of climate change is real and is happening now.”

The impacts of a changing climate have already driven cocoa prices to near-historic highs, hitting costs not seen since the 1980s. Declining production along the Ivory Coast and resulting rising prices will continue to impact chocolate costs in the foreseeable future.

“[Ivory Coast’s] industry regulator stopped sales for the 2024-2025 season until it has a clear picture of expected production,” said Yves Kone, managing director of Le Conseil Cafe-Cacao, a government agency that manages the country’s cocoa sector, according to Bloomberg.

Climactic issues are not the only factor driving the costs of cocoa up. The conflict in the Red Sea that has made shipping more dangerous and expensive has also had an impact on cocoa prices, according to the International Cocoa Association.

“With the recent surge in freight rates due to tensions in the Red Sea area, international trade is likely to be affected,” the Association announced in December 2023. “With already high cocoa prices, an additional cost resulting from high freight rates may be daunting for cocoa users and could affect demand.”

As prices have soared, manufacturers have responded by making their products smaller to save costs while prices remain the same. Cadbury eggs, an Easter staple, have gradually reduced in size in the U.S. since at least 2006 and are noticeably smaller in foreign markets such as the United Kingdom — down from 286 grams (almost 11 ounces) in 2022 to 245 grams (almost 8.6 ounces) in 2024, a more than 14% reduction in size, as reported by The Telegraph.

Julio Sevilla, a marketing professor at the University of Georgia’s Terry College of Business, explained to The Washington Post how manufacturers manage to get away with the smaller sizes.

“As consumers, we are not completely rational. The one piece of numeric information people are sensitive to is price,” said Sevilla, according to the WP. “Size matters less.”

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