"Your chocolate Easter bunny will not only cost more this year because of rising cocoa prices. Shrinkflation means it's likely to be smaller too" Bloomberg Asia writes.
The Republic of Côte d’Ivoire, the world's top cocoa producer, has been grappling with unpredictable weather, diseases, and aging trees, resulting in plummeting yields and soaring cocoa bean prices - up by a staggering 150% in the past year. Further fueling the hike, speculators are driving cocoa futures to new heights. With demand expected to outstrip global production, the industry predicts a shortfall of up to 330,000 metric tons.
As the cost of production skyrockets, chocolate giants such as Hershey's, Mondelez and Mars Inc are hiking prices, leaving chocolate aficionados feeling the pinch. Manufacturers of chocolate products are responding to these cost pressures by subtly shrinking the size of their offerings, a tactic known as shrinkflation, which allows them to maintain retail prices despite reducing the volume of the product. Iconic shapes are being modified, as seen with Toblerone's wider spacing, and recipes are being altered to integrate less expensive ingredients.
The chocolate industry's historically inelastic demand, characterised by consistent consumer demand despite price fluctuations, is now facing an unprecedented challenge. As individuals reevaluate their spending habits and consider more affordable options or reduce purchases of premium brands, the chocolate market appears to be transitioning towards elasticity, signaling a significant change in the landscape of chocolate consumption.
Historically, the chocolate industry has come up with innovative solutions during challenging times. For example, during World War II, faced with a milk shortage, Mars Inc. created M&M's, which required less milk than traditional chocolate bars. Similarly, during the Great Depression, the 5 cent ice cream cone was introduced to make the product more accessible.
As the chocolate industry adapts to this new economic terrain, what innovative approaches will it deploy to sustain consumer delight and navigate the muddled waters of supply chain disruptions and price sensitivity?
Beyond BS
Behavioural Problem Behind Polling Accuracy
Opinion polls wield significant influence during elections, aiding politicians in gauging public sentiment and voters in assessing candidates' popularity. However, the 2015 UK General Election's erroneous forecasts prompted scrutiny of their reliability. Professor Jouni Kuha, a survey methodology expert, scrutinised the failure's root causes. Polls, primarily pre-election tools, can sway voters' behaviour via the "bandwagon effect," altering perceptions of parties' electability. Despite failures, polls guide policy by providing decision-makers with public preferences, contingent on transparent, accurate methodologies. The 2015 debacle attributed sampling flaws for mispredictions, prompting industry reforms. As polling continues to evolve, can insights from behavioural field further refine its methodologies?
Lattés and Lotteries:
The Great Latté Debate in personal finance revolves around the impact of daily latté purchases on financial health. Some experts argue that forgoing a daily coffee can lead to significant long-term savings. Others counter that such advice is oversimplified and the saved money might just be spent elsewhere. et, beyond the numbers, lattés and lottery tickets offer more than just transactions—they provide hope and psychological well-being at a modest cost. Perhaps, in the end, it's not about the expense, but the value they bring to our lives. Can behavioural science help us understand these nuanced decisions? Read more at John Howe's (Professor Emeritus of Finance, University of Missouri) blog.
Call for Judgments in Plain Language
On March 9, 2024, Chief Justice of India (CJI) DY Chandrachud addressed the pressing need for judges to write judgments in a language comprehensible to the common people.
CJI Chandrachud's stance, reiterated since 2022, emphasises the need to make legal documents accessible beyond the legal fraternity. The historic bias towards verbose, formal language, inherited from colonial times, has perpetuated barriers between the law and the public. By advocating for clarity, Chandrachud seeks to democratise the law, fostering transparency, accountability, and legal literacy. Drawing parallels with global initiatives in Australia, the UK, and the US, he urges enactment of legislation mandating plain language in legal discourse, promoting inclusivity and effective governance. Read more on Bar and Bench
Challenge of Changing Minds
In a recent study titled "Addressing climate change with behavioral science: A global intervention tournament in 63 countries," researchers evaluated the impact of 11 behavioural interventions on climate change attitudes and actions among 59,440 participants across 63 nations. Findings indicate that these strategies had a limited effect, primarily influencing individuals who were already non-skeptical about climate change. Notably, interventions focused on reducing psychological distance affected beliefs, letter-writing to future generations increased policy support, and inducing negative emotions spurred intentions to share climate information. Yet, no intervention significantly motivated participants to engage in a demanding tree-planting activity, with some tactics unexpectedly deterring this action. The study's findings highlight just how tough it can be to inspire climate action given the wide range of people's attitudes and behaviours.
