Chocolate at a Crossroads: Inside the industry’s response to supply shocks

The crisis confronting cocoa continues even as prices plummeted in the back of 2025 compared to historic highs a year earlier as climate change, conscious consumerism and chaotic costs collide – causing chocolate companies to rethink their sourcing and go-to-market strategies.

In 2025, cocoa prices dropped more than 50% to about $5,000 per ton in December after reaching a high of nearly $12,000 per ton at the end of 2024 thanks in part to optimistic predictions for harvests in Cote d’Ivoire and slowdown in speculations that surged prices in 2024.

Despite the correction, prices remain nearly twice as high as the average of $2,525 per ton between 2012 and 2022. And even though inputs may be stabilizing – for now – future production and pricing remain unclear, prompting industry stakeholders to explore alternative sourcing solutions, formulations and business models more broadly as climate change and price volatility remain an unchecked threat.

The future of coco is further complicated by rising consumer interest in the ethical and environmental challenges of cocoa and chocolate production, which became mainstream concerns when shoppers sought the reason for recent price hikes.

FoodNavigator-USA recently moderated a series of three webinars exploring these issues and the future of cocoa. Hosted by Branchfood and Business Location Switzerland, the three-part series available on demand on Branchfood’s YouTube channel, brought together experts from across the industry and academia to explore topics such as sustainable cocoa sourcing, advances in fermentation and flavor development, emerging consumer preferences and cutting edge technologies shaping production and supply chains. This episode of Foodnavigator-usa’s Soup-To-Nuts podcast includes highlights from the first of those three sessions – examining the ongoing threats to the cocoa supply, consumer expectations, farming community needs and innovative solutions that balance both.

The wake-up call

For decades, cocoa production grew steadily, but as Barry Callebaut VP of Global R&D Paul Lechavalier explains this assumption cracked in the past two years.

“We used to see, year after year, the production of cocoa growing steadily. Of course, there were some years that were better than others, but it was growing. And in the last two years, we saw specifically an impact on the crops, specifically in West Africa, and this was, I think, a wake up call for the industry,” he said, referencing extreme weather that translated to disease.

He added other regions have aging plants that have not been replaced or complemented with new generations, which also compromises output.

The threats to cocoa’s volumes didn’t end there. Zurich University of Applied Science Professor Susan Mieschner Schwenninger explained farmers face increasing challenges post-harvest that can compromise bean quality and their ability to produce flavor notes consumers want.

“One of the major threats is the high variability of spontaneous fermentation during post harvesting, which is still the standard in cocoa producing regions. So, since fermentation relies on microorganisms, those little helpers from the environment, and is influenced by many other parameters, such as the weather conditions, climate raw materials, or even the fermentation devices … the outcomes might be unpredictable,” she said.

The threat to the quality of the beans Mieschner describes may be more critical than that to the quantities of beans because, as Lechavalier explains, consumers have demonstrated a willingness to pay more for premium chocolate but they will walk away if the experience does not meet their expectations or emotional needs.

Leveraging AI and cutting-edge technology to meet consumer needs

To deliver the quality – and quantity – of chocolate consumers want in the face of supply disruptions and volatile prices, stakeholders are embracing new technologies – including AI, synthetic biology and precision fermentation – as well as traditional solutions.

Helping to lead the charge in leveraging AI to address coco challenges is NotCo, which the company’s Senior Team Leader for B2B and R&D Mariana Frias Silva explains is a food-tech company that uses proprietary AI and machine learning technology that it has dubbed Giuseppe to develop market winning product innovations, formulations and other solutions.

“AI is helping us create solutions that can either extend or even replace the cocoa by using alternative ingredients and still protecting what the consumers would expect in a chocolate. So the power of AI here isn’t just about finding and getting access to those ingredients. It’s about understanding how we can combine them efficiently, and how you can do it across taste, texture, cost, nutritional guidelines and regulatory. So, in a way, it is how you can optimize simultaneously all of these variables and getting the best product that you can. So in a way, this means less trial and error, faster reformulation, and then it frees up a lot of the time from the developer for deeper creativity and also for scientific research,” she said.

Balancing the need of brands and farmers

Precision fermentation and synthetic biology are two other solutions that Mieschner explains can help fill in supply gaps by producing alternative ingredients, but she notes they do not fully capture the complexity of cocoa or address the cultural heritage and environmental challenges facing coco farming communities.

“The future ecosystem will be, yeah hybrid. Cocoa farming will remain the backbone, while precision fermentation or synthetic biology can support – filling in the gaps, enhancing sustainability and even opening new product categories,” she said.

To better meet the needs of coco communities, Mieschner is helping to address threats at the farm level by developing microbial starter cultures for cocoa post-harvesting to bring safety and consistency to cocoa fermentation.

How will consumer perceptions shape the future of coco?

The extent to which any of the solutions are viable for the long term goes back to the consumer and the degree to which they will accept coco made with these technologies.

While there is room for differences between shoppers, Lechavalier reiterated their acceptance of chocolate made with different techniques hinges on the eating experience and emotional connection to the product.

As all three experts note, there are logistical, ethical and consumer adoption tradeoffs for each of these solutions, which suggests there is not a silver bullet answer for challenges facing cocoa. Rather, to effectively tackle the myriad threats to cocoa and meet consumer expectations, stakeholders across the value chain will need to trial traditional and technological solutions

For those interested in learning more about these solutions and others for the challenges facing coco, tune in for the full one-hour webinar, which is available on demand for free at Branchfood’s YouTube channel – simply search for Cocoa Futures Session 1: The Next Wave of Chocolate Innovation.

tune in for Confectionery News’ upcoming free webinar exploring the future of chocolate, which broadcasts Feb. 12. To learn more and register visit confectionerynews.com and click on the events tab at the top. https://www.confectionerynews.com/Events/the-future-of-chocolate/