Food Industry News

Mondelez Toblerone preserve quality by reducing the weight of chocolate

Manufacturers of Toblerone announced a decrease in the number of chocolate “pyramids” by two, due to which the weight of the chocolate will decrease from 400 grams to 360 grams and from 170 grams to 150 grams. This is explained by the need to reduce costs while maintaining the quality of chocolate.

So far, only two UK consumers are missing two pieces. The company Mondelez International, which owns Toblerone, denies the connection of these changes with the UK exit from the EU (Brexit). However, the company noted that the pound exchange rate in the country is “unprofitable,” writes the Daily Mail.

In October this year, the pound fell to its lowest level against the currencies of major trading partners in the UK 168 years. The pound against the dollar fell to a ratio of 1: 1.22.

The prices for raw materials is not at the peak. This point was held in July this year, when the price of cocoa rose to highs already since 70-ies of the last century, says the executive director of the confectionery market Elizaveta Nikitin research. One reason for this was the Brexit, however, an important role was played by a poor harvest in the main countries of production and the growth of the deficit of cocoa in the world.

Cocoa is grown in only a few countries. 90% of the total crop is harvested in Côte d'Ivoire, Ghana, Indonesia and Nigeria. These countries control the entire market, so any changes there are reflected in the price of raw materials. Thus, due to political instability in Côte d'Ivoire, a sharp increase in prices was also observed in 2010-2011.

Now cocoa prices are declining quite quickly, as a new crop is expected to be quite good. According to Alexei Pugov, director general of the AB-Center agribusiness expert and analytical center, the average prices in October 2016 were at the level of $ 2711 per ton, which is 8 15,2% lower than the level a year ago (October 2015).

However, apart from cocoa raw materials (oil, paste, powder) in the cost of the final product and the change affects the cost of additives. According to experts, in the cost of production of cocoa products (cocoa butter, cocoa paste) account for about 50%, about 25% falls on the marketing and promotion networks, the rest is sugar, nuts, dried fruit and various other ingredients and additives.

Prices for most of them grew up. So, in recent months 13 stock prices of sugar rose in 2,2 times we were in October in the area of ​​the marks in 22 cents per pound.

In Russia, a reduction in the size of chocolate products has not yet been observed, although due to devaluation, the ruble has depreciated in half over the past two years. “The cost of chocolate production by about 70% is either imported ingredients or ingredients whose pricing is related to world prices for these types of raw materials. Thus, the dynamics of world prices for cocoa does not affect as much as exchange rate fluctuations, ”explained Elizaveta Nikitina.

Manufacturers offset the cost of devaluation by raising the price of finished products. First of all, chocolate and products with a high content of cocoa raw materials are getting more expensive. “In 2016, in the context of weakening prices for cocoa raw materials, there was no decrease in chocolate prices, on the contrary, there was an increase in prices below the average inflation rate in the country,” notes Alexey Plugov.

According to him, retail prices for chocolate for the year in October 2016 compared to October 2015 increased by 12,8%, for two years - by 55,5%, for three years - by 73,3%

Prices for chocolates, where, including additives, are also present, have not risen significantly. For a year - by 5%, for two years - by 33,8%, for three years - by 55,5%.

Against this background, experts note a significant decrease in demand for confectionery products. According to Marina Lapenkova, director of work with global companies at Nielsen Russia, in 2016 compared to 2015, the consumption of chocolate bars decreased by 11% in real terms, and chocolates - by 9%. Chocolate bars fall by 3% in real terms. The strongest decline in sales in physical terms was observed in the category of chocolate tablets (-17%). Only the category of curly chocolate shows a positive trend, increasing sales by 9% in kind.

In addition, manufacturers are forced to change the recipe, replacing expensive cocoa products with cheaper ones - cocoa butter substitutes, cookies, waffles. This is not to the taste of consumers, and many either refuse sugary products at all, or replace expensive types with cheaper ones.

“Russian consumers, still in a saving mode, are actively switching from expensive segments of chocolate to cheaper ones. This is indicated by a drop in sales of the premium segment in all categories, while the economy segment is growing, ”says a representative of Nielsen.

Thus, the costs incurred due to the fall of the national currency and the rise in the cost of raw materials are compensated by producers in different ways. If the British were asked to come to terms with the decrease in the size of sweets, then for the Russians there is another mechanism - a price increase coupled with a deterioration in quality. According to Russian representatives of the pr-community, it was much more reasonable to raise the price of Toblerone than to deprive it of its usual form, which caused outrage from fans.

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