Rising cocoa prices put local chocolate makers in sticky situation

The rising price of cocoa will soon force local chocolate makers to make a tough call: pass the price increase on to their customers or find cheaper ingredients to make confections.

Thanks to increasing global demand cocoa prices have risen over 30-percent in the last two years and experts expect demand will remain well above production over the next five years. Now chocolate makers must decide how much of their increasing costs they're willing to absorb, or if they will either increase their prices or down-grade ingredients.

Some local chocolatiers say their distributers have already warned them about a major price increase.

"[Our distributer] called us and told us the next time we do the contract it's going to be 30-percent higher," said Hercules Candy and Chocolate Shop owner and candy maker Steve Andrianos.

As the cost of various ingredients have risen steadily over the years, Andrianos has had to increase prices accordingly. So far, he says he hasn't seen the increases make a large impact on demand.

But downtown at Sweet on Chocolate, owner P.J. Goodman says he has certainly noticed a change in demand over the years.

"When the economy went down a few years back I definitely noticed a change," explained Goodman. "People used to come in for a pound of chocolate, now they're more likely to only order a half pound."

Goodman says he's chosen to absorb cost increases for the last six years instead of passing them on to customers, including a 44-percent price increase on cocoa in 2011. But with his cocoa cost likely to rise again, Goodman says he'll have no choice but to increase his prices.

"It's not something I'm looking forward to doing but I know I have to in order to stay profitable and stay in business," said Goodman.

Andrianos says he'll likely have to do the same as both owners say they won't consider cutting costs by substituting cheaper ingredients like palm or cotton seed oil for cocoa butter.

"I have standards with my products," said Goodman. "I don't like to make things with lower quality ingredients."

"That'd be terrible!" agreed Andrianos. "Our customers know the difference and come to us because of the quality."

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