The iconic German chocolate manufacturer, Ritter Sport, is bracing for continued price increases and acknowledging the profound impact of climate change on global cocoa production, according to recent statements from CEO Andreas Ronken. Ronken’s stark assessment underscores a deepening crisis within the chocolate industry, characterized by escalating costs, reduced margins and potential shifts in consumer behavior.
“It won’t be cheaper” Ronken stated bluntly when questioned about the possibility of chocolate prices declining, directly reflecting the precarious situation facing producers. He attributed the surging costs to the disruptive effects of climate change, specifically highlighting the devastating consequences of erratic rainfall patterns in major cocoa-growing regions. “We’ve broken the world” he remarked, a stark admission of the environmental damage impacting vital agricultural commodities.
The price of cocoa has more than doubled in recent months, currently hovering around $5,500, a level which Ronken acknowledged represents a crucial benefit for farmers. “They can now live off it, which personally delights me” he conceded. However, this beneficial price surge has simultaneously triggered a decline in sales volume of up to ten percent, creating a challenging juncture for the company. Ritter Sport, like many chocolate manufacturers, is struggling to absorb the cost increases and pass them on fully to consumers.
“We simply cannot pass on everything that would be necessary due to the raw material price increases” Ronken explained, painting a picture of a looming “chocolate crisis” – a scenario characterized by diminishing profit margins and dwindling sales figures. The CEO suggests most consumers have a “psychological pain point” around the 2-3 Euro price range per chocolate bar, but insists that price adjustments are unavoidable given the current market conditions. He vehemently opposes reducing the size of the 100-gram “classic” Ritter Sport bar, viewing price increases as a more equitable solution for consumers.
While facing immediate pressures, Ritter Sport is also exploring avenues for growth, particularly in the seasonal market. Signaling a strategic diversification, the company plans to introduce a chocolate figurine for the upcoming holiday season, a move intended to bolster sales and compete within the increasingly competitive market. “We are examining this closely” Ronken stated, hinting at the potential for a range of festive characters, with the iconic Santa Claus emerging as the frontrunner for the debut figurine.
