You have to shell out more for cakes, chocolates & more this Christmas

New Delhi: Christmas cheer comes with a heavier tag this year: consumers are paying 5%-20% more than last year for cakes, chocolates and dinners, driven by all-time high prices of cocoa, cocoa butter and coffee, along with a 30%-40% year-on-year increase in the cost of edible oils, wheat flour and sugar.

Makers of chocolates and artisanal cookies as well as almost all fine-dine restaurants, cafes and bakeries including Starbucks, Theobroma, Barista, Olive and Indigo have raised prices.

“Prices of chocolates are up 20% year on year, given the steep inflation in commodity costs,” said Jayen Mehta, managing director of Amul, which makes dairy, chocolates and cheese.

Some packaged chocolate companies have reduced grammage in addition to increasing prices. Cocoa, the key commodity used in chocolate, surged to a record $12,900 per tonne in 2024, up 180% from last year. Analysts attributed the surge to supply shortfall as a result of lower production in key cocoa supplying countries such as Ghana and Ivory Coast, in addition to high logistics costs inflating transportation bills.

As a double whammy, costs of edible oil, a universal ingredient, shot up on account of a 22% increase in import duties levied by the government in September.

“Prices are 10% higher for us on average compared to last year because of steep inflationary trends,” said Anurag Katriar, founder of Indigo Hospitality, which runs Indigo and Neel restaurant chains. “We have annual contracts with raw material suppliers and try to absorb costs. When the annual contracts come up for renewal next March, prices may be further impacted,” he said.

Chains said they are trying to keep prices in check by balancing the mix, and that their price increases are not comparable to the record surge in key commodity costs.

“Prices are up 10-15% over last year. However, we try to balance out the mix across our menu and absorb some of the food costs… So, it doesn’t impact consumers much, who also come to our outlets for experiences,” said Dhruv Oberoi, chef at Olive Bar & Kitchen.

While the surge in commodity prices may take a toll on profitability this financial year, increasing prices intermittently could impact footfalls in the crucial Christmas-New Year week.

“Our price hike activity is an annual planned exercise and is basis market trends and cost inflation,” said Rajat Agrawal, chief executive officer of Barista Coffee. “Our increase on an average has been less than 5% last year, which is substantially lower than price inflation on commodities such as cocoa, coffee and wheat,” he said.

According to data by state civil supplies departments to the government, prices of wheat flour, another staple ingredient, are at a 15-year high at Rs 40 per kg this month.

Tata Starbucks and Bakingo declined to comment. Emails sent to Mondelez, Theobroma and Third Wave Coffee did not elicit a response until press time Tuesday.

Dining out has seen two back-to-back quarters of slowdown in April-June and July-September, as consumers cut back on discretionary spending impacted by inflation. Chains are running promotions, additions to menu and food festivals to shore up dining-out numbers.