Nestlé Bars
It’s merger time in chocolate land. Now that Kraft has swallowed Cadbury, in effect outbidding the Hershey/Ferrero odd couple, Hershey itself is little more than an ant at the candy company picnic dominated by Mars/Wrigley, Kraft/Cadbury and Nestlé. And Nestlé feels a little piqued having been pushed to third place. What to do? Buy Hershey and reclaim the number one spot. At least that’s what a Reuters report suggests.
The International Labor Rights Fund began a new letter writing campaign to protest the use of child labor in the cocoa sector. The letters ask the CEOs of Hershey, Mars and Nestlé about their concrete efforts to limit the use of child labor on cocoa farms in West Africa. The campaign aims to end the aura of secrecy and the lack of accountability surrounding the manner in which the Harkin-Engel Protocol has been implemented. Go to the website and send a letter yourself.
And just in time for Valentine’s Day, the ILRF produced a new scorecard to help you understand your choices when it comes to buying chocolate. The scorecard rates companies as either bitter, semi-sweet and sweet depending on their record regarding labor issues. There are few surprises. As I pointed out, buying fair-trade chocolate is the surest way to ensure that child labor was not used during the production of cocoa. But the semi-sweet group shows that it is possible for conventional companies to do some things right.
A couple of weeks ago, I wrote here that Hershey’s price increases might be accompanied by another strategy to pass higher prices on to consumers–decreasing the weight of the product. And, lo and behold, here’s the confirmation. Yesterday, the International Herald Tribune published an article highlighting the shrinking food weights for a number of manufacturers. Skippy Peanut butter jars will contain 16.3oz rather than 18oz and forget the half gallon cartons of orange juice, they’ll contain only 89 rather than 96 fl. oz. As for chocolate, Mars will decrease the volume in some of its candies and others will probably follow.
But then we have already seen the incredibly shrinking package in the chocolate market for some time. When I grew up in Germany, a chocolate bar contained 100 grams of chocolate. For me, that’s a normal size. With the emergence of all the fancy gourmet chocolates over the past decade, however, bar sizes have decreased even before the recent price increases. I guess one way to state the exclusivity of a chocolate bar is to make it small. I wonder what it is in our subconscious that associates small with exclusive rather than rip-off.
A couple of days ago, the Financial Times reported that Hershey is the latest in of a long string of food processors that will divert an increasing amount of their financial resources in commodity market hedging against future price increases.
The increases in commodity prices have had their effects on many consumer products and, given the rally in cocoa prices, it was only a question of time before chocolate prices would follow suit. Last week Hershey announced that it would increase candy bar prices by 11%.
