According to Financial Times market data, cocoa market prices were up 143% on January 15 compared to the same time in 2024. The spike in cocoa costs came only a month after the business and economic publication reported how the cocoa sector was on “the brink of a big price surge”.
The message was clear: Prepare for cocoa prices to hit new inflation-adjusted peaks. Despite this surge, consumer demand remains inelastic, meaning price hikes are unlikely to deter purchases significantly. Industry predictions suggest that even if cocoa prices were to double, consumer consumption rates may remain steady.
As one of the biggest seasons for sales, this paints a positive picture for manufacturers preparing to rollout their new product line-ups.
Cocoa prices versus demand
Brands run the risk of losing consumers if their prices increase without the perceived value accompanying these hikes. Consumers could switch to alternative competitors or private-label products.
While cocoa price rises may result in changes to consumer purchasing behaviour, the fear is that these will not only remain a temporary consequence of the current cocoa issues, but instead become a permanent habit. As a result, brands will have to work extra hard to formulate exciting offers to encourage shoppers to switch back and select their SKUs.
Why cocoa prices are still so high
Chocolate prices remain high due to various factors. “It’s a combination of unfavourable weather over the past seasons and demand remaining quite firm,” says Thijs Geijer, Senior Sector Economist covering the Food and Agriculture sector at ING. “This has led to falling stocks of cocoa leaving markets quite sensitive to any (negative) news,” adds Geijer. For example, UK Consumer prices (CPI) for chocolate were up by almost 12% (11.7) in December compared to the previous year.
Preparing for Easter sales
The countdown to Easter, adds to the mounting pressure on chocolate producers and businesses. To retain appeal with their audiences, brands need to find formulation and pricing solutions that satisfy their profit margins and consumers’ expectations.
Consumers want to know they’ll receive the price and associated quality of Easter eggs they’ve come to know and expect. While premiumisation and rich indulgent options have grown in recent years, shoppers will still want to know they’re getting the best value products for their spending.
“There is a time lag in the transmission from changes in global market prices to consumer products, for example, because chocolate makers have longer-term contracts or hedges that protect them from price increases in the short term,” says Thijs Geijer, Senior Sector Economist covering the Food and Agriculture sector at ING.
High cocoa prices bite
Nonetheless, across the board chocolate prices are set to rise this year. “We do expect that high cocoa prices will continue to resonate in consumer prices in 2025 as well,” says Geijer. “The amount of cocoa processed by the cocoa industry in Europe fell a bit in Q3 2024, potentially pointing at weaker demand due to higher prices, but Q2 figures were still quite strong,” says Geijer. “Latest figures for Q4 point at quite a drop in cocoa grinding figures, so, it seems that high prices are really starting to bite,” Geijer shares.
So, while it may not be possible to keep Easter offerings at 2024 prices, innovative SKUs at a range of prices with high visibility far ahead of the April holiday should keep sales buoyant. Indeed, a scan through Confectionery News’ first NPD round-up of 2025, demonstrates the eagerness of the top CPGs to see the new year as an opportunity to leverage the sales power of seasonality to engage new and existing consumers.
