The gooey goodness of Nutella, a hazelnut-flavoured chocolate spread, has created many ardent fans across the world. If you're one of them, this recent report will leave you frowning.
Bad weather conditions in Turkey have caused a major shortage of hazelnuts which is one of the prime ingredients of the spread. Turkey accounts for over 70 percent of the world's production of hazelnuts. Unfeasible weather conditions like hailstorms and frost during the crucial growing months have damaged the hazelnut crop and impacted the harvest by almost 30 percent. The shortage in production has caused hazelnut prices to increase by more than 60 percent, the highest that it has been in the last 10 years.
The hazelnut crisis has left buyers reeling and consumers may have to face higher prices or lesser availability of products that use hazelnuts. Ferrero, the Piedmont-based company purchases as much as 25% of the world's production of hazelnuts to make Nutella and the famous Ferrero Rocher chocolate. Every jar of Nutella is known to use about 50 hazelnuts. This makes it most vulnerable to a shortage in the availability of hazelnuts and its price surge.
The fact that the company sold about $2.46 billion worth of the spread last year in more than 75 countries, shows that the shortage of Nutella will break many hearts. But, here's a ray of hope. Recently, Ferrero acquired Turkey's largest hazelnut processor, Oltan Group which may protect them from the rising market pressures by maintaining a steady supply. The company has released a statement to assure the consumers that they are tracking the issue very closely and do not foresee any shortage in the availability of Nutella due to the crisis in Turkey. Though, how this may affect its prices remains unclear.
"Inclement weather last spring in Turkey has impacted this year's hazelnut harvest. We are tracking this issue closely and there's no foreseeable impact on the availability of Nutella. As always, we will maintain the high quality of the Nutella product that consumers know and love."
CommentsThe bad news is that besides hazelnuts, the company also has to deal with the rising prices of other ingredients like palm oil and cocoa. If such circumstances persist, it could be a warning signal for a price adjustment. Meanwhile, food companies are also facing a price hike for almonds and coffee. Droughts in California and long dry spells in Brazil have led to lower almond and coffee production.