Real chocolate is making a comeback: falling cocoa prices are reshaping the confectionery market
21 May 10:20
After a year of smaller bars, extra wafers, nuts, fruits, and chocolate alternatives, candy makers are returning to real chocolate. The reason is a sharp drop in cocoa bean prices following a record surge in 2024. According to Reuters, cocoa futures have fallen by nearly 70% from their record highs at the end of 2024, reports "Komersant Ukrainian"
This is what is forcing some manufacturers to revise their recipes and return more cocoa to products that were previously replaced with cheaper alternatives.
Why manufacturers turned away from real chocolate
In 2024, cocoa prices nearly tripled, exceeding $12,000 per ton. The reasons included unfavorable weather, plant diseases, and harvest problems in key producing countries.
As a result, chocolate manufacturers began looking for ways to cut costs. Companies:
- reduced the size of the bars;
- added more wafers, fruits, and nuts;
- raised prices;
- reduced cocoa inventories;
- launched chocolate alternatives with lower cocoa content;
- invested in products without cocoa or made with vegetable fats.
Such products often could no longer legally be called chocolate, so they were marketed as “chocolate candies” or chocolate alternatives.
Hershey Returns to Original Recipes
One of the most notable examples is the American confectionery manufacturer Hershey. The company publicly announced that it plans to increase the cocoa content in its chocolate alternatives.
Following criticism from the grandson of Reese’s founder, who criticized Hershey for changing the recipes of iconic products, the company announced that starting next year, all Hershey’s and Reese’s products will return to their original recipes.
Other companies are likely to follow suit, according to industry participants and experts such as independent consultant Roger Bradshaw.
“It makes perfect sense to go back to real chocolate given current cocoa prices,” he said.
Why Cocoa Prices Have Fallen
Paradoxically, it was the high prices themselves that partly caused the impending drop. When cocoa prices spiked, manufacturers began buying less of it and using substitutes more actively.
This led to a drop in demand. Experts estimate that demand for cocoa could fall to a nine-year low in the 12-month period ending in September.
However, now that cocoa prices have fallen, the market expects a gradual recovery in demand starting in the second half of the year.
Will chocolate get cheaper in stores?
The drop in cocoa prices isn’t immediately reflected on supermarket price tags. The reason is that large manufacturers typically hedge their purchases—that is, they lock in raw material prices months in advance—and hold significant inventories.
According to market participants’ estimates, it may take about 10 months before changes in cocoa prices fully feed through to retail chocolate prices.
At the same time, supermarkets and other buyers have been pressuring manufacturers since mid-2025, demanding price cuts. Some companies have already begun to make concessions.
Mondelez is already cutting prices in Europe
Mondelez reported that it has lowered some chocolate prices in Europe and has begun to see an increase in sales volumes.
This is an important signal for the market: if prices fall, consumers may start buying chocolate more actively again, and manufacturers may return to products with a higher cocoa content.
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Barry Callebaut sees customers returning to chocolate
Global giant Barry Callebaut, whose ingredients are used in about a quarter of the world’s chocolate, is also seeing a shift in market sentiment. The company expects sales to grow by 1–5% in the six months through August compared to the previous year.
According to Barry Callebaut CEO Hein Schumacher, at current cocoa prices, producing chocolate can be cheaper than making chocolate alternatives with vegetable fats instead of cocoa butter. That is why some customers are already returning to chocolate.
Legislation is also pushing for real chocolate
It’s not just prices that are influencing the market. In some countries, legal requirements for what can be called chocolate are also changing.
For example, in Brazil—the world’s sixth-largest consumer of chocolate per capita—a law has been passed requiring that products labeled “dark chocolate” contain at least 35% cocoa solids.
This brings the Brazilian market closer to the rules in Europe and North America, where cocoa content requirements are stricter.
What this means for farmers
The return of manufacturers to real chocolate could be good news for the nearly 2 million farmers who grow cocoa in Côte d’Ivoire and Ghana. These two countries are the world’s largest cocoa producers.
If demand for cocoa recovers, it could support bean prices and farmers’ incomes. However, experts warn that a quick return to previous levels is unlikely.
Demand will recover slowly
According to consultants’ estimates, a full recovery of cocoa demand to pre-2023–2024 price shock levels could take about 2.5 years.
There are several reasons for this. Some consumers, especially the younger generation, have become more open to innovations such as cocoa-free chocolate. Additionally, the popularity of weight-loss products is affecting the consumption of sweets.
Will chocolate alternatives disappear?
Despite the return to traditional recipes, chocolate alternatives are unlikely to disappear entirely. Some of them remain profitable in the mass market segment, especially if manufacturers fear another rise in cocoa prices.
Consequently, the market may split: premium and classic brands will increasingly return to real chocolate, while cheaper products will continue to use substitutes to some extent.
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