Why is chocolate getting more expensive?
Chocolate lovers might have missed the headlines that the cost of making their sweet treat is getting more expensive, but they certainly will have felt it in their pockets.
Chocolate prices began their ascent in 2022 and peaked at an all-time high in January 2024. But it doesn’t stop there, prices are continuing to surge. With mounting production costs, some of the world’s largest chocolate manufacturers have begun taking a range of measures as their profits decline. Hershey, as well as Mondelēz International, the owner of Cadbury, began passing on costs to consumers last year. Impacted by an 11.5% reduction in its year-on-year profits in Q4 2023, Hershey also announced that it would be cutting 5% of its workforce. Shrinkflation is another way manufacturers are driving down costs. Companies including Mars Inc. have begun reducing the size of some of their chocolate bars while maintaining the original price.
So, what’s driving this unprecedented rise in chocolate getting more expensive? Let’s unwrap the key factors behind this surge and what it means for chocoholics worldwide.
Climate change is a significant issue and continues to pose a real threat to cocoa cultivation. Rising temperatures, in tandem with the El Niño weather system, are partly responsible, having ushered in warmer weather in Ghana and the Ivory Coast, two countries that farm around 60% of the world’s cocoa. Erratic rainfall is another symptom associated with climate change and has decimated crops. Last year, Ivory Coast’s cocoa producing areas experienced the highest rainfall in two decades.
Cocoa bean shortage: Erratic weather patterns, coupled with disease outbreaks in key cocoa-producing regions, have led to a shortage in cocoa bean supply which has caused prices to soar to all-time highs, leading to chocolate prices getting more expensive. One reported knock-on effect of these price hikes is that the state run processing plants in Ghana and Ivory Coast are not receiving the cocoa they pre-ordered at pre-agreed prices as middlemen are selling cocoa beans on the spot market at higher prices which the plants cannot afford. The plants are currently running at a significantly reduced capacity and are using their existing stock of cocoa beans and turning it into cocoa butter and liquor that’s essential for chocolate production.
Rising production costs: Chocolate production is an intricate process that involves meticulous farming, harvesting and processing of cocoa beans. With rising inflation affecting everything from labour to transportation, chocolate manufacturers face escalating production costs. Consequently, these expenses are being passed on to consumers in the form of prices going up.
Disease: Heavy rainfall in West African cocoa producing areas has exacerbated the spread of swollen-shoot virus and black-pod disease that kill off cocoa trees. It’s estimated that around 20% of Ivory Coast’s cocoa trees had been infected with swollen-shoot disease by the end of last year.
With cocoa prices at an all-time high, chocolate is getting more expensive and rapidly becoming an indulgence that’s now hitting both companies and consumers in their pockets. There’s a few ways chocolate manufacturers can try to offset costs for its customers; we just hope that they act now to ensure that both us – and our grandkids – will still be able to enjoy the chocolates we know and love in the decades to come.
Read more about chocolate and our chocolate alternatives: