At the Jacques Torres chocolate shop in Manhattan, Torres watches as a box of Valentine's Day chocolates is wrapped in cellophane.
"It’s Valentine's and you can see the store packed with hearts," says Torres.
Torres says 15 percent of his revenue for the year comes from Valentine's Day, but it's gotten a little less profitable, largely because of the commodities market.
"The price of cocoa has risen significantly," Torres adds. "The forecast is that in less than 10 years, we will have a shortage of cocoa."
Cocoa prices jumped about 25 percent last year because demand for chocolate is up.
"We're seeing emerging markets like China, the Middle East, all of these regions that traditionally haven't consumed chocolate are beginning to purchase chocolate," says Hester Jeon, research analyst with IBISworld. Jeon says the issue pushing demand is that Americans have gone gourmet. "People are eating a lot more dark chocolate and that has a heavier cocoa content, which is also driving up the demand for cocoa."
Torres says most of the chocolate he sells is now dark chocolate, which marks a big difference from 10 years ago.
"So we will have to increase our price a little bit… hopefully, we will stay very reasonable," he says.
Torres is doing several things to keep prices low and quality high. He's offering more "inclusion chocolate" — that's chocolate with nuts or coffee in it — which uses less cocoa; he is working directly with farmers and he's growing some of his own cocoa.
"I'm going to be very honest with my customer and show what’s going on in the world and if I have a raise in price, explain why," Torres says.
Still, Torres says he can't increase prices in line with costs. Even on Valentine's Day, customers are very price sensitive these days and he doesn't want his sweets to leave a bitter taste in their mouths.
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