WASHINGTON, April 15 (UPI) -- As Easter Sunday approaches, chocolate businesses around the country have been preparing for what is typically one of the highest chocolate consumption periods of the year. Last year alone, Americans spent an estimated $3.1 billion on Easter chocolate.
However, because of high cocoa prices and the Trump administration's trade policy, this year has been especially stressful for small businesses in the chocolate industry.
"We've been in a state of constant panic for the last two weeks because we were anticipating what would happen," said Yelena Caputo, who is one of the co-owners of A Priori, a small business centered around importing and distributing craft chocolate.
Caputo said he company does businesses with many global partners, including in Vietnam and the European Union. So, when President Donald Trump's initial round of "reciprocal tariffs" were announced, he became nervous about continuing those trading relationships.
Moreover, even with the recent pause on reciprocal tariffs, excluding China, Caputo said the remaining 10% tariffs have still caused a significant hit to profit margins, which A Priori has tried its best not to pass on to clients.
" We will be taking a very hard look at our margins, but at the end of the day, we're a mom-and-pop small business. We don't have anything in our reserves to contribute. ... It is true that it is the U.S. consumer who will be paying the brunt of that bill, but we are just trying to mitigate that as much as possible," Caputo said.
One of Caputo's clients is a small business in the District of Columbia, The Chocolate House, which is a small boutique shop with crowded shelves and tables filled with the latest Easter products.
Peng Xu, manager of The Chocolate House, said that he had not yet felt a huge impact from Trump's tariff announcement but was "sure it will come."
However, Xu said that over the last two years, he had to increase the price of his products by about 20% to 30% because of rising cocoa prices. He still tries his best to reduce the impact on the consumer.
"This has impacted our margins, for sure," Xu said.
The price of cocoa is about $8,000 per ton, which is almost a 400% increase from the average price range of $2,000 to $3,000 at the start of 2023.
Paul McNamara, a professor of agricultural and consumer economics of the University of Illinois at Urbana-Champaign, said that although a number of factors contributed to the price increase, one of the principal reasons was frequent weather anomalies in Cote d'Ivoire and Ghana over the last few years that have caused significantly lower production levels because cocoa is sensitive to weather changes.
Cote d'Ivoire and Ghana account for roughly 60% of the world's global cocoa supply.
McNamara also said that although the higher cost of cocoa caused some decrease in the global demand for chocolate, consumers tend to be "relatively price inelastic," meaning that they will tend to keep buying chocolate regardless of the price.
However, even so, McNamara noted that this year's Easter chocolate consumption could be lower than what is typically expected due to rising costs, shrinkflation and the weakening of the U.S. dollar as a result of Trump's tariff policies.
" This year's going to be an amazing year to study after the fact," McNamara said.
In fact, according to a study by WalletHub, Americans are expected to spend $2 billion this year on Easter chocolate, down from $3.1 billion last year.
Professor Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Halifax, Nova Scotia, Canada, said that the price of cocoa has been decreasing since December 2024, which he believes has a strong correlation with consumers' fears of an upcoming economic downturn, thereby reducing chocolate demand.
"I think there is a strong correlation between Trump's comeback and cocoa prices," Charlebois said.
When people worry in the future about having less money, they would be less likely to purchase luxury goods, and chocolate, Charlebois said, is one of those luxury goods.
In addition to the chocolate itself, Trump's ongoing trade war with China has driven up costs of the materials needed to wrap or package the items for some businesses.
June Drummond, the owner of June B Sweet in Washington, D.C., said that if Trump's tariffs on China remains in place for the next six months, she will have to change the design and concept of her boxes. She presently obtains them from China, but is looking for other sources.
"We haven't found it yet, but it's something that we are working on fast because I only have supplies for the next six, eight months to hold us," Drummond said.
