Dessert industry gets cooked on soaring costs, supply crunch

Home > Business > Industry

Dessert industry gets cooked on soaring costs, supply crunch

Published: 26 Jul. 2025, 16:57 Updated: 27 Jul. 2025, 16:29

Audio report: written by reporters, read by AI

People queue to buy desserts at the 2025 Cafe & Bakery Fair in Gangnam District, southern Seoul, on Feb. 19. [YONHAP]

A combination of soaring raw material prices and an unusually early heat wave has pushed small businesses in the bakery, confectionery and coffee sectors into a state of turmoil.

With key ingredients such as eggs and fresh cream in short supply and cocoa import prices still rising, the industries are bracing for deeper challenges. As product prices climb, consumers are also likely to feel the financial strain.

Shortage of fresh cream amid early heatwave

According to the confectionery and bakery industry on Friday, fresh cream, a primary ingredient in cakes, cookies and other desserts, is facing a supply shortage. The temperature rise has affected dairy cows, causing a decrease in milk production.

Although such shortages typically occur during the summer months, this year’s higher-than-usual temperatures have exacerbated the crisis.

Major retail outlets like Emart, Homeplus and online stores have run out of stock of popular brands such as Seoul Dairy's 500-milliliter (17-ounce) fresh cream, which is usually priced around 6,000 won ($4). Some open-market sellers are listing it for as much as 31,590 won per unit.

"Not only wholesalers but even large supermarkets and convenience stores are struggling to get fresh cream. We've had to limit customers to buying no more than two items per person for cakes and other products. We're also considering raising prices," Yoon, who runs a dessert shop in Incheon, said.

Franchises also feeling the pressure

The situation is similarly troubling for franchise coffee shops and businesses that source ingredients in bulk through business-to-business transactions.

"We've been scrambling to source fresh cream from across the country and we can't even accept preorders due to the severe shortage," an employee at a dessert shop located inside a department store in Seoul said.

An employee at a branch of Twosome Place in Gyeonggi added, "We can't even place orders for fresh cream from headquarters. For high-demand items like the matcha cream latte, we're advising customers to order other drinks instead."

Small cakes on display at a bakery in Seoul in June [NOH YU-RIM]

Soaring egg and chocolate prices

Egg prices have also surged. According to the Korea Institute for Animal Products Quality Evaluation, 30 large eggs now cost 5,818 won — a 19 percent increase from 4,894 won in January. The Korea Rural Economic Institute attributes the surge to the aging of laying hens and the spread of low-pathogenic avian influenza, which has reduced the egg supply.

Meanwhile, cocoa prices continue to climb due to abnormal weather in major cocoa-producing countries such as Brazil, Vietnam and West Africa. As of Thursday, cocoa futures were trading at $8,124 per ton, up 11.15 percent from $7,309 a week earlier. The price of couverture chocolate, a key ingredient in chocolate desserts, has also surged from around 30,000 won for 2.5 kilograms (5.5 pounds) to as much as 95,600 won.

Price hikes and ingredient substitutions

Bakery and confectionery businesses are increasingly concerned about the impact of rising costs on their profits. Small business owners, in particular, are feeling the strain.

According to the Korea Commission for Corporate Partnership, there were 22,216 small-scale bakeries in 2022. While some businesses have begun substituting ingredients or raising prices, many fear that if the situation persists, further price hikes may become inevitable.

Some shops have already started to raise prices, particularly for items like cake slices.

"I recently visited a cafe where a slice of cake was priced at over 10,000 won," said Ryu Dong-hwan, 27, a resident of Suwon in Gyeonggi.

"It's become clear that dessert prices have generally gone up. While price hikes may be unavoidable given the cost of raw materials, I now feel burdened even ordering a coffee and dessert together."

Tarts on display at the 2025 Cafe & Bakery Fair in Gangnam District, southern Seoul, on Feb. 19 [YONHAP]

Experts predict that the supply crisis for raw materials, exacerbated by climate change, will continue for the foreseeable future.

"Every summer, the heatwave arrives earlier, affecting milk production," a source from the Korea Dairy Committee said.

"In early July, milk production sharply dropped, which will significantly impact fresh cream production compared to last year."

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY NOH YU-RIM [[email protected]]