By Benjamin Turner for Compartés Chocolatier
- There has been increased global demand driving prices up and supply shortages across West Africa and other key cocoa-producing regions
- Disruptions in existing supply chains, rising transportation costs and labor shortage are largely driven by adverse weather conditions
Soaring prices for raw materials like cocoa aren’t the only challenges facing U.S. chocolate manufacturers and brands. They must also navigate new tariffs that add another layer of complexity to today’s tense economic climate. Recent trade policies have led to increased import duties that directly affect the majority of cocoa and chocolate products. While these tariffs are intended to promote and protect domestic industries, as well as stemming from broader geopolitical tensions, they’re having unintended consequences for many U.S. confectionery companies due to their reliance on imported cocoa. Higher tariffs are often passed down by companies to consumers in the form of higher prices. Yet the industry risks shifting consumer purchasing behavior by raising prices, potentially causing a decline in sales.
Implications for Chocolate Consumers
- Higher Prices on Chocolate Products Across the Board – It’s likely that consumers will spend between 10% and 20% more for the same chocolate products in 2025 than they did in 2024, according to commodities analyst David Branch at Wells Fargo’s Agri-Food Institute. Wholesale prices surged by 30% from January 2024 to January 2025, so it’s impossible for consumers to go much longer without feeling the effects.
- Quality Changes in Many Product Lines – Some brands may choose to use less chocolate or replace cocoa content with lower-cost ingredients. This translates to chocolates with a lower-quality flavor and texture in most cases.
- Fewer Sales, Promotions, and Discounts – Sales for holidays are likely to offer less of a discount than before. You’ll also find that promotional offers and bulk discounts become less available due to rising wholesale costs.
- Shrinkflation – You’re spending the same amount as before, but you’re getting less product in each package. It can help brands avoid noticeable price hikes, such as how a king-size two-pack of Reese’s hearts increased by 13% from February 2024 to February 2025, from $2.29 to $2.59.
- Less Access to Luxury and High End Chocolates – With production costs rising and quality raw materials becoming harder to source, some luxury chocolate manufacturers may simply produce less product or dramatically increase prices. This can lead to a lack of available high-end chocolates for sale, especially as consumer demand continues to rise. Consumers may be forced to switch to mass-market chocolates or buy them less frequently.
Impact on the Broader Chocolate Market
Some consumers may cut back on discretionary spending due to the pressure from tariffs and other economic policies. This could also drive demand for plant-based confectionery products and alternative chocolate substitutes. It is also likely to increase demand for sustainably sourced cocoa and ethical chocolate production. As the supply chain adjusts, companies may seek alternative cocoa sources or invest in sustainability initiatives to help secure future supplies.
Looking Ahead at Cocoa’s Future
Chocolate brands that want to stay competitive in a changing market are likely to implement innovations in sourcing, new recipes, adjusted marketing strategies to justify higher costs, and increased transparency for consumer trust. For example, top designer chocolate manufacturers have already confirmed that additional price increases will be necessary in 2025 to offset record cocoa prices. They’re likely to increase their marketing efforts over the course of the year to reposition themselves as luxury brands worthy of the higher price. The cocoa market may be demonstrating a few signs of short-term price relief, but the long-term impact of three years of supply deficit and new tariffs continues to pressure chocolate manufacturers and consumers alike. The industry must adapt to remain sustainable despite these challenges. As cocoa prices and tariffs change the industry, consumers are likely to see changes in product offerings, quality, and pricing.
CBX Vibe: ‘Chocolate Hills‘ Khruangbin, Leon Bridges
