(Bloomberg) -- Mondelez International Inc., the maker of Oreo cookies and Toblerone chocolates, will raise prices next year on some of its products as the company faces pressure from cocoa and sugar costs.
The cocoa price rally, in particular, is “so important” that the company will need to do a “straightforward price increase,” Chief Executive Officer Dirk Van de Put said in a Bloomberg Television interview Monday. Just making adjustments through shrinkflation, or reducing product sizes, “won't solve this inflation at this stage,” he said.
Cocoa futures in New York have rallied more than 50% in 2023 and are trading at the highest price since 1978 amid forecasts for poor crops in top growers Ivory Coast and Ghana. Meanwhile, supply concerns have also sparked a surge for raw sugar, which is up almost 40% this year.
“While the rest of our input cost is largely flat for next year, those two are really causing us to have to increase prices again,” Van de Put said.
He added that consumers “can absorb a certain price increase” and are shifting purchasing behaviors in order to do so, including by buying snack multi-packs, which have a lower price per unit.
--With assistance from Romaine Bostick and Scarlet Fu.
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