‘It’s a disaster’: Easter 2020 a bitter time for chocolate industry

Easter is usually a time of joy for our chocolate industry, but 2020 will be remembered with horror.

The usual bumper sales have been slashed by dwindling crowds due to coronavirus restrictions and widespread job losses have dried up customer spending.

Ian Neeland and his wife Leanne, owners of Yarra Valley Chocolaterie and Ice Creamery.

"It’s a disaster," said Ian Neeland, co-owner of the Yarra Valley Chocolaterie and Ice Creamery, whose usual Easter customer numbers of 30,000 have reduced to a trickle.

Mr Neeland said sales were down by 80 per cent on last Easter across his three stores at Yarra Glen, Torquay on the Great Ocean Road and Flinders on the Mornington Peninsula.

He has laid off 160 of 220 staff. Despite online sales increasing and a new click-and-collect service, the company is heavily discounting prices in a bid to move stock.

Haigh’s Chocolates marketing manager Fiona Krawczyk said the company’s 20 retail outlets nationally were still open but all were "experiencing negative growth on last year".

"Like others in the retail industry, foot traffic has all but disappeared which means that our stores do not have the regular Easter flurry," Ms Krawczyk said.

"And that in turn means the registers aren’t ringing like we would expect."

Manufacturing giant Cadbury’s declared that "COVID-19 hasn’t impacted sales of Easter products" but other chocolate makers are bracing for long-term woes.

Gillian Powell, CEO of Hallam confectionery manufacturer Fyna Foods, which is known for chocolate bilbies and Easter eggs, said production was up 15 per cent on last year when the company sold Easter stock to retailers and distributors by March.

But she has heard some customers have sold just 20 per cent of stock.

Now retailers may be able to claim markdown allowances on their contracts which could mean net losses for Fyna.

"We’re only a small manufacturer, so 10 or 20 thousand dollars of markdown support for a few bilbies amounts to, quite often, losing money on the product."

She estimated that production orders by the end of April could be as low as 50 per cent down on the same month last year.

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John Grisold, co-owner of Chocolatier Australia chocolate factory in Heidelberg West, said it was the toughest time in the company’s 35 years, with business more than 30 per cent down on last Easter.

The company completed its Easter sales to big retailers such as Coles by February.

However, its division supplying restaurants, hotels and caterers ‘‘virtually died overnight’’.

Its retail store in Ivanhoe also had to close due to drop in customers and difficulty managing social distancing in the store.

‘‘Our modelling shows that our sales are going to decelerate as we move into the middle part of the year,’’ Mr Grisold said. ‘‘Without a shadow of a doubt the toughest business environment we’ve ever been in and protecting cash is absolutely key to survival.

‘‘That can only last for so long, because as our sales drop away, our cash flow is going to evaporate. That’s when things are going to get really tough.’’

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