Chart of the week: “shrinkflation” hits the chocolate market

Toblerone, Quality Street and Creme Eggs have all been hit by “shrinkflation”, with customers getting less for more after the price of cocoa butter soared – up 40% this year alone.

821-COTW-1200

Toblerone isn't the only famous chocolate to have suffered "shrinkflation" a reduction in portion size for the same price, says Emiko Terazono in the FT. In recent years a 1kg Quality Street tin has been cut to 820g, and six Creme Eggs have become five.

Cocoa bean futures have risen only slowly in the past few years, but the price of cocoa butter has soared, gaining 40% this year alone. It contains beans and other ingredients, including sugar and whole milk powder, which have both jumped by 50% amid supply squeezes.

The squeeze is easing now, thanks to better weather.

Viewpoint

"[Warren] Buffett once declared he has an 800 number to call if he ever feels the urge to buy an airline stock so someone can talk him out of it. Well this week [he] invested over a billion dollars into America's big four carriers. Why? Sure, they are cheap and oil is low... But a bigger attraction, ironically, could be the sector's enormous fixed costs' something Mr Buffett has long cited as a deal breaker. If the US economy is near take-off, the likes of American Airlines has ten times the operational leverage of, say, ExxonMobil and Caterpillar. And nothing beats an oligopoly; the four biggest US airlines have an 80% domestic [market] share "

Deutsche Bank

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