Soap making is a craft that relies on high-quality ingredients like olive oil and cocoa butter to produce luxurious, skin-nourishing products. However, in recent years, the cost of these key ingredients has surged, making it almost impossible for soap makers to maintain their craft without significantly raising prices.
I was in Las Vegas for a show last month and experienced my own sticker shock while visiting a few stores. Bath bombs had risen to $10 each. Bubble Bars were retailing at $22 (EACH!), and I even found some (very poorly) designed soap was in excess of $4.00/oz.
Like every industry, handmade soaps and sundries have increased dramatically over the past year. Today, I want to explain why...
Increased costs are universal, but there are two ingredients that are most significantly impacted this year (and will continue into future years).
The Rising Costs of Olive Oil
Olive oil is a cornerstone ingredient in soap making. Not only is it easy to formulate with, it's prized for its incredible properties. It contains high levels of oleic acid and polyphenols, which can help improve skin tone and texture, and even combat early signs of aging. It also contains high levels of Vitamin E, which can help smooth skin and hair.
Over the past eight years, the cost of olive oil has increased dramatically. In 2015, a liter of extra virgin olive oil typically ranged from $7 to $8. As of 2023, that price has skyrocketed, with a liter of extra virgin olive oil now costing between $25 and $35, depending on the region and quality. Premium and organic varieties can exceed $40 per liter.
This surge in price is largely due to a combination of factors:
- Droughts and heatwaves have severely impacted olive production, especially in countries like Spain, Italy, and Greece, which are the world's largest producers.
- Diseases like Xylella fastidiosa have decimated olive crops, leading to lower yields and higher prices.
- Global supply chain disruptions and increased demand have further driven up costs.
In fact, producers say that once this year's crops is used, there will be no more olive oil until next year. We're rapidly approaching that time.
The Price Surge of Cocoa Butter
Cocoa butter is another essential ingredient known for its rich, skin-conditioning properties and if you eat chocolate, you know that it has also seen a steep price increase. Cocoa prices reached an all-time high in March 2024.
In 2015, the cost of cocoa butter was around $5 to $7 per pound. Today, that price has doubled or even tripled, with the cost per pound ranging from $15 to $25, depending on the source and quality. Fair trade and organic cocoa butter can command prices upwards of $30 per pound.
In early 2024, cocoa prices surged to over $11,000 per metric ton—a figure nearly three times higher than the average prices since the 1980s.
The outlook isn't good. The global cocoa supply is expected to decrease by about 11% in 2023–2024 to 4.45 million metric tons. This is due to a number of challenges, including climate change, increased input costs, and pests and diseases
The reasons behind this price hike are also multifaceted:
- The global demand for cocoa butter has risen sharply due to its widespread use in both the chocolate and cosmetics industries.
- Meanwhile, cocoa bean production has struggled to keep up with demand, particularly in West Africa, where most of the world's cocoa is grown.
- Political instability, economic challenges, and climate-related issues have all contributed to lower yields, tightening supply and pushing prices higher.
Impact on Soap Makers
For soap makers, these rising costs pose significant challenges. Many small-scale artisans who rely heavily on olive oil and cocoa butter have had to make tough decisions, either by increasing their product prices or by finding alternative ingredients that can offer similar benefits at a lower cost.
This means we have to explore other ways to formulate our favorite recipes in order to keep prices reasonable.
Some soap makers are now turning to more affordable oils, like sunflower or rice bran oil, or incorporating locally sourced ingredients (including tallow) to help offset the increased costs. However, these substitutions require careful reformulation to ensure that the final product maintains its desired qualities. It's not always an easy fix.
What's Next for Soap makers?
As these price trends show no signs of reversing, we have to continue to adapt, staying informed about market conditions and exploring new ways to manage costs without sacrificing quality.
Soap makers are on the front lines of these challenges, striving to maintain their craft amidst rising costs and uncertain market conditions. So, we ask that you stay patient with us and continue to support your favorite small businesses through the next few challenging years...