Nutella fans, look away now. Hazelnut prices are rocketing due to bad weather and your favourite spread could get more expensive. Here's why:
Hazelnut prices are up 60 per cent after hail storms and cold weather in late March devastated crops grown in Turkey. The country is the world's biggest producer of hazelnuts and controls over 70 per cent of the global market.
The timing is particularly unfortunate because people are crazy about Nutella with sales of the hazelnut spread, owned by Italy's Ferrero Group, up 6.4 per cent to $2.46 billion in 2013, according to data from Euromonitor. The only problem? Nutella is the world's biggest buyer of hazelnuts and disruptions in the supply chain could lead to a price hike.
Ferrero, which also owns Kinder Bueno and Ferrero Roche, has moved to secure access to the ingredients after the acquisition of Oltan Group, Turkey's largest exporter and processor of hazelnuts, last month.
But the company is facing more headwinds.
The price of cocoa beans, another key ingredient in Nutella, has risen sharply this year prompting candy makers Nestle, Mondelez and Hershey to raise chocolate prices in recent months.
Will Ferrero follow suit? Well, you're in luck, the company has not indicated it intends to hike prices for its 50-hazelnut per 300 grams jar spread. But you might want to hold on to it.