Chocolate is a godsend and a legacy carried through thousands of years through agro-culinary traditions. It’s a universal body healer; yet, 100 years ago, its role transformed. Cocoa became chocolate products that people could grab from the nearest store to their homes.
Current cocoa prices are raising problems for anyone, from corporations to small businesses, and impacting those who activate around it – or eat it regularly. Two trends are estimated to emerge in light of the rising cocoa prices:
- More supplements and sugar processed into “chocolate” candies
- Superior chocolate could decrease in price and fall within the range of lower-quality chocolate as the prices of quality universal body healer will level with sugary fillers.
The price shock is familiar, but are these disasters’ catalysts? Well, it’s a combination of factors. These spiking prices are becoming increasingly difficult to disentangle: economic instability, climate change, supply chain disruptions, farming practices, and corporate practices all contribute to the rising intricacy of international food chains and product price points. Nowhere can this instance be better exemplified than in the spiking costs of buying cocoa and chocolate.
So, how are companies approaching the stagnating cocoa landscape? What can chocolate lovers expect in 2025?
First, let’s understand the reasons behind the shortage
The worldwide climate-change-caused cocoa shortage is the starting point for this “chocapocalypse”. Most cocoa beans come from West Africa, where increasing temperatures, in part induced by deforestation and dry spells, have taken their toll on cocoa crops. Cocoa production relies on humidity, so both situations create challenges for the beans’ production, and even if producers are optimistic that 2025 will see some improvements in growth, the consumers will still feel the bite they’ve been dealing with.
Currently, over 70% of the global cocoa stock comes from African countries, with Côte d’Ivoire leading the pack and being followed by Ghana, Cameroon, and Nigeria. The nation is also home to ICCO, the International Cocoa Organization, and in 2022, it accounted for 1/3 of the global total.
Cocoa, the fermented, full-of-fat seed of Theobroma cacao, is a non-negotiable in the creation of chocolate flavors. Yet, chocolate makers crank out new confectionary with less cocoa—or none at all.
Making a case for Mars
UK shoppers were taken aback by Mars’ reduction of 10 grams off the mass-made Galaxy chocolate bar in 2023. The treat’s package received a makeover, but the price remained the same. Cocoa traders, however, were not surprised. The bigwig is famous for its widely-known M&M’s and Twix sweets, having registered sales of $47BN in 2024. It’s one of the biggest pet food and candy companies worldwide, and even they took a common practice among confectionaries. This is because they commercialize smaller chocolate doses for households. This decision is easily understandable if one thinks of the companies that begin selling chocolate with 0% chocolate. The shopper is, eventually, responsible for making decisions regarding their consumption, all the more so if they’re regular chocolate users.
Other businesses take another route and look for cocoa providers with better standing in the market, for they don’t feel the impact of the cocoa shortage as deep as smaller businesses do. They may also simply resort to industry experts with abundant knowledge to create new products and meet the high but unsatisfied demand on the market. For example, OFI specialists with the necessary know-how to create bending, tasty cocoa-based products recommend their clients tackle challenges regarding confectionary making with them, confident in the possibility of finding surprisingly pertinent solutions.
Any improvement in cocoa production?
Cocoa harvesters in West Africa forecast better crops this year, partly due to the improving weather conditions permitting farmers to return to the field. They’re able to advance with the primary crop’s continuing harvest, which improves confectionaries’ sentiments regarding the industry’s distant future. Nevertheless, most cocoa buyers have yet to feel the price reductions. They’re just slightly lower, and a better impact is on the agenda for the following months – or one-to-two years. Plus, the damage done by the terrible dips recently in crop production persists. Not even a forecasted 11% increase in crop production can reconstitute significantly low inventories.
As expected but feared, market price analysis indicates that prices won’t be reduced this year. NY’s warehouses hit new lows, and London’s stocks fell by 70%. The worrying shortage of stocked cocoa, demand growth, and rising cocoa production from Cameroon and Ghana are signs that confectionaries should prepare for another year of high costs – or scarcity. Ghana, for instance, could raise cocoa prices by 45% this year.
The price for a ton of cocoa equals around $12K—way more than the $2K-$4K general price the crops registered over the previous 15 years. At the same time, international demand gains 3% per year. The U.S. has the most considerable sweet tooth, with daily consumption standing at 3.14 grams per person, whereas countries like India, China, Indonesia, and Bangladesh hit the sad point of 0.0 grams/per person.
Companies resist with tweaks or completely new recipes
With cocoa prices hitting new zeniths and little to no belief in recovery, companies have felt the immediate impact of the scarcity and passed it on to more expensive products to customers. Consumers are expected to reduce their cocoa and candy consumption if inflation doesn’t flatten, leaving behind make-up and alcohol.
Companies also use automation to slash packages as there’s little to no room for new rounds of price increases. This prompts the invention of new solutions to offset the decreasing reliance on cocoa and other popular flavors.
The result? Heavyweight distributors, which have already tweaked their recipes due to cocoa price hikes, aren’t excluded from introducing even more artificial flavors and fillers while slashing their sweets’ cocoa percentage. Or come up with other mind-bending solutions, like Nestle’s one. The bigwig launched a hazelnut-based bubbly Aero chocolate bar, which weighs way less than rivaling chocolate bars – due to the air bubbles in the composition. On the other hand, a new Kit Kat product that stands out through a new flavor line-up named Chocolate Frosted Donut is selling, and uses a partial chocolate layer instead of a complete coating.
Bottom line
While cocoa’s situation may need more room for improvement, there’s hope that 2025 will be kinder to every participant involved in the industry and across the supply chain. Stay posted to see where the industry is going!
