Cocoa Prices Are Plunging. Why Is Chocolate Still So Expensive?

After last year’s historic rally, cocoa prices are heading for a record annual slump. But there’s no sign the cost of your candies, bars or chocolate Santas will follow any time soon. 

Cocoa futures almost tripled last year, inflicting pain on manufacturers, who in turn hiked chocolate prices. They’re still working through beans they bought at the top of the rally. They’ve also made recipe changes that are not easy to reverse. 

Producers and analysts expect cheaper cocoa to only start feeding through to supermarket aisles in the second half of next year, and even that is far from certain. That means households already stretched by pricier groceries from beef to coffee will have to keep weighing whether chocolate remains an affordable treat.

“The prices that the chocolate industry is currently working off are very high and painful,” said Jonathan Parkman, head of agricultural sales at commodities brokerage Marex Group in London. “It’s going to take us quite a while to work through that.”

Cocoa soared to a record of almost $13,000 a ton last year as disease and extreme weather ravaged crops in Ivory Coast and Ghana, which supply more than half of the world’s cocoa. But prices tumbled as harvest prospects improved, demand weakened and some concerns over a lasting shortage subsided. They’re down about 50% this year, heading for the steepest annual decline since records began in 1960.

The surge left a deep mark on the industry, with everyone from packaged food giants to small artisanal chocolatiers across Europe and the US scrambling to secure enough cocoa and balance costs against profits. Some were left fighting for survival. 

They won’t be quick to cut back on retail prices.

Lambertz, one of Germany’s oldest confectioners, has enough cocoa stocks to last until almost mid-2026 after securing them when prices were high, said owner Hermann Bühlbecker, who’s been with the company for five decades. “As far as I can remember, there has never been such a price explosion,” he said.

The family-run business, known as Aachener Printen- und Schokoladenfabrik Henry Lambertz GmbH, makes cookies and chocolate-glazed gingerbread, a popular Christmas delicacy. Stocking up on pricey cocoa added about €150 million ($176 million) in extra annual costs, the equivalent of one-fifth of last year’s revenue. 

Like many others, Lambertz had to pass on costs to consumers and accept a loss in sales volume.

Producers are now trying to recoup some of those lost revenues and margin losses, according to Scott Amoye, the vice president of commodities at California-based chocolate maker Guittard Chocolate Co., whose clients include bakers and confectioners. “You could go through a significant period in 2026 before you see any relief in pricing,” he said. 

Some of the biggest chocolate makers are staying away from signaling any changes, citing volatility on the cocoa market. Kit Kat-maker Nestle SA said that while recent shifts in prices were encouraging, it’s still too early to comment on specific changes. Hershey Co., which produces Reese’s Peanut Butter Cups, expected some “deflation” to start happening “deeper into 2026,” Chief Financial Officer Steve Voskuil said on an earnings call in October.  

They have good reasons to be cautious. 

While cocoa futures tumbled below $5,000 a ton in November, they’re now hovering around the $6,000 mark in New York as traders weigh shrinking expectations for a big surplus this season. Analysts from Rabobank and Citigroup Inc. have trimmed their estimates in recent weeks.

West African supply remains precarious and the region’s smallholder farmers are chronically underfunded, lacking sufficient access to fertilizer, disease-resistant seedlings and tools that help cope with climate change. 

“The long-term structural challenges are not resolved,” Peter Feld, chief executive officer of Barry Callebaut AG, said on last month’s analyst call. “Cocoa farming in West Africa faces a chronic investment gap. Chocolate has been far too cheap for far too long.” 

The world’s largest bulk-chocolate maker is looking to grow its cocoa-alternatives division, while exploring innovations as a way to cushion business from persistent cocoa volatility. It’s also considering splitting off its cocoa grinding unit from the rest of the business.

Across the chocolate world, producers have found ways to cope with that volatility by tweaking recipes to lower cocoa content, or reducing portion sizes. 

In Germany, popular purple-wrapped Milka chocolate bars are now 10% lighter even as their maker Mondelez International Inc. hiked prices by about a quarter, according to research from the Hamburg Consumer Advice Centre. In the UK, classic bars like Nestle’s Toffee Crisp and McVitie’s Penguins can no longer be called “chocolate” after their makers reduced cocoa butter in favor of cheaper vegetable oils. 

Reversing recipe swaps isn’t easy, meaning these shifts are set to stick for longer.

For now, temporary promotional discounts are more likely than price cuts, according to Allyson Myers, vice president of sales and marketing at the Vermont-based Lake Champlain Chocolates. “We probably won’t be able to give it all back,” she said.