Stock up now, Nutella prices could be going up after frost damaged hazelnut crop

Over 70 percent of the word's hazelnut crop may have been affected by severe weather in Turkey.
By Matt Bradwell  |  Aug. 15, 2014 at 2:07 PM
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ALBA, Italy, Aug. 15 (UPI) -- Nutella enthusiasts around the world are in a panic as they're faced with potentially rising prices and a possible shortage of the beloved hazelnut spread.

After hail storms and frost devastated hazelnut crops along Turkey's Black Sea coast in March, prices rose from $6,500 per ton to $10,500. Turkey currently grows over 70 percent of the world's supply of hazelnuts. All told, up to 300,000 tons of hazelnuts are feared to be damaged by the extreme weather.

To combat the lost crop, Nutella producer Ferrero purchased Turkish hazelnut supplier Oltan Group in July.

Nutella represents nearly 70 percent of chocolate spreads sold in the U.S. There are over 50 hazelnuts in each 13 oz. jar.

"Ferrero has protected itself from the supply issues to an extent by buying Oltan Group," Julian Gale, deputy editor of Foodnews explained to Bloomberg Businessweek.

"There is ongoing strong demand, albeit with some occasional quiet patches when buyers hold back for a period, which helps keeps [hazelnut] prices firm."

Still, the demand for hazelnut spreads has grown so great in recent years, especially in the United States and China, that Nutella's global sales have grown from $1.3 billion annually in 2004 to $2.5 billion in 2013.

The snack is so beloved, that terrorists waging jihad on behalf of the Islamic State reportedly tweeted pictures of themselves lovingly showing off their favorite spread.

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