Your Easter Basket Might Be Short A Chocolate Bunny This Year. Here's Why

Christmas might be behind us and Valentines' Day just around the corner, but anyone familiar with the food manufacturing industry won't be too surprised to hear that chocolate makers are already turning their attention towards Easter celebrations. Unfortunately, early signs are pointing to a possible shortage in chocolate Easter bunnies, particularly those coming out of Germany. German candy makers say a malfunctioning global supply chain, along with unfavorable growing conditions, could make it more challenging for them to produce the seasonal treat (via Reuters).

In a press release, the Association of the German Confectionery Industry (BDSI) chief executive director Dr. Carsten Bernoth, is warning that: "The market for important raw materials is depleted, supply chains that have been in place for years are no longer working. This can also have an impact on the imminent Easter business, for instance that not all popular products such as chocolate bunnies can be produced as planned, because important raw materials, packaging materials or freight capacities are not sufficiently available." The press release names wheat, sugar, and powdered milk, among other chocolate making ingredients, as having higher prices than previous years.

Germany's chocolate industry faces high raw material costs

In cases when raw materials for chocolate making are available, Bernoth says manufacturers are having to contend with sharp price increases (via BDSI). As an example, the BDSI chief executive singles out wheat, whose price shot up by an eye-watering 50% on the commodities market. Aside from the challenges posed by the need to find and obtain less costly raw materials, Bernoth said manufacturers are having to face supply chain blockages that make it a challenge to obtain packaging materials. The BDSI executive director shares that freight costs from the Chinese city of Shanghai to the German port city of Rotterdam rose from $2,000 in December 2020 to $10,000 just one year later.

The pandemic is taking its toll on Germany's chocolate manufacturers, too. Bernoth says companies are seeing staff shortages triggered by the Omicron variant. The industry association says an increase in absences due to COVID is causing issues with the country's chocolate production.

Germany's chocolate industry is asking for help

Even before the German confectionary association raised warning flags about the state of raw materials, cocoa producers like Ivory Coast (which, according to Nasdaq, produces most of the world's chocolate) had already warned that the world could expect an 11% drop in cocoa production thanks to weather conditions and "the need to rest trees after three years of strong harvests." Director general of Ivory Coast's Cocoa and Coffee Council Yves Brahima Kone warned Reuters last year, that "Cocoa output is expected to be down in the upcoming campaign. I think we'll have about 250,000 tonnes less." A drought in parts of South America has also pushed soybean prices high (via Nasdaq).

All this does not mean Easter baskets have been cancelled. Instead, the industry is hoping for some level of government assistance in order to keep producers afloat. "The breaking point has been reached. The policy-makers are now called upon to protect medium-sized companies in particular from further costly and bureaucratic burdens. Otherwise, we risk the loss of the medium-sized economic structure in Germany that was considered to be robust hitherto," cautioned Bernoth (via BDSI).