Cocoa demand drives prices up

The price of cocoa beans has risen 22 percent in the past year, according to research by NBC news.

And that financial hit had been a burden on some local chocolatiers.

According to the Wall Street Journal, the drop in production from the cocoa plant due to increasingly dry weather has caused the price to nearly double since 2007. That jump is exacerbated by the increasing consumer penchant for dark chocolate, which requires the use of more cocoa beans, limiting supply and driving up costs even further.

The prices at Nevada City Chocolate Shoppe at 236 Broad St., Nevada City, have risen from $16 a pound to $19 a pound, in line with increasing chocolate costs.

“Hopefully, we keep it at a moderate increase,” said Linda Hansen, who owns the business with her husband, Bill. “Sometimes we kind of deal with some of it, take a little bit of a hit on the ownership side and hope we can increase sales in different ways.”

Nevada City Chocolate Shoppe has been in operation for about four years, and prices have changed just the once, Linda Hansen said. About 10 percent of the store’s items are not chocolate, which offsets some of the price increase, she said.

Local chocolatier Debbie Peterson, co-owner and candy maker at Lazy Dog Chocolateria at 111 Mill St., Grass Valley, said she has not seen prices change in the 35 years she has purchased chocolate in bulk from Milwaukee-based company Ambrosia.

“We’ve ordered 10,000 pounds so far this year, but it’s been consistent,” she said. “I wonder if that’s because I buy it in such large quantities. They probably order a huge quantity because they send out a semitruck with nothing but chocolate every week from Milwaukee, and I suspect they probably buy such a huge amount that they’re locked into a certain price. I certainly hope we won’t be surprised next time.”

Ken Kossoudji, owner of the now-closed Dorado Chocolates at 104 E. Main St., Grass Valley, said prices might have more than doubled, depending on the level of the quality of the chocolate. Such an increase in costs is particularly difficult in a small town like Grass Valley, Kossoudji said.

“It made it difficult to sell product because you have to raise your prices — and in a small town like Grass Valley, people don’t have a high income, frankly,” he said.

Cocoa beans are as varied as wine grapes, Kossoudji said, meaning higher quality cocoa beans are more expensive than ever and lower quality varieties experience a slight increase that may or may not be transferred to consumer prices.

“If chocolate costs $3 a pound and goes up to $4 a pound, you don’t have to raise your price by much, but if your cocoa beans cost $20 a pound and it goes up to $30 a pound, you have to raise your prices even higher,” Kossoudji said. “I (hadn’t) raised my prices in Grass Valley in a very, very long time. The market just doesn’t have the funds to do it.”

That’s partly why Kossoudji closed his Dorado Chocolate business in Grass Valley, which has been for sale for two months, he said.

“The people of Grass Valley are great, but unfortunately, the economy is not getting any better, and if you go to other places, the economies are booming,” Kossoudji said.

“I’ve been doing other things for several years now, so it was time to finally move on from Grass Valley. When you’re in a town of 13,000 people, it’s too small of an economy to sustain a business at any income level. I’ve made more investing in Apple stock in the last month than I can make in Grass Valley in a year.”

Kossoudji is selling the building for $305,000 as of Oct. 18, much less than what he paid for it 10 years ago.

To contact Staff Writer Jennifer Terman, email jterman@theunion.com or call 530-477-4230.


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The Union Updated Nov 7, 2013 11:11AM Published Nov 8, 2013 10:07PM Copyright 2013 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.