After a year of escalating costs that culminated in an already peak price of $12,261 per ton in April 2024, cocoa prices surged once again in December 2024, which, according to the World Bank, were up by 30%. On December 18, they reached an all-time high, once again, hitting $12,646 per ton, TrackInsight reports.
Overall, 2024 saw historic highs for cocoa prices which increased by 177.39%, following several factors including weather disruption such as the El Niño phenomenon, delays and uncertainty surrounding the European Union Deforestation Regulation (EUDR) and dwindling volumes.
Rising cocoa costs have continued into the 2024-2025 cocoa season, despite hopes for a shift in the sector’s struggles.
With fears around cocoa’s volatility ongoing, manufacturers are pivoting to best navigate these uncertainties in 2025 and beyond. Here’s how:
1. Alt-choc growth
With cocoa’s costs and accessibility proving problematic for brands, retailers and consumers, manufacturers are ramping up their efforts to develop cocoa-free alternative chocolate. By mimicking the taste, texture and eating experience of chocolate, manufacturers are hoping to continue to appeal to chocolate-seeking consumers, while avoiding the issues caused by using conventional cocoa in their formulations.
Manufacturers are delving beyond traditional cocoa to explore possible alternatives. Carob, for example, which comes from the tree of the same name, has been referred to as the first-generation substitute of cocoa by sustainable innovation platform, The Mills Fabrica. With carob requiring less water to grow and Spain, Portugal and Italy already considered major-producing countries, carob may offer a viable and sustainable alternative to cocoa.
Increasingly, we’re seeing alt-choc brands emerging and growing. In December 2024, Danish Endless Food Co secured €1 million in a pre-seed funding round to develop its alternative to conventional chocolate, Thic (This Isn’t Chocolate). Instead of cocoa, Thic applies upcycling to its chocolate-making process and uses brewers’ used grains, a primary byproduct of beer brewing to produce Thic. Several other key startups in the waste efficiency and reduction space include CaPao, Blue Stripes and Voyage.
Manufacturers are also using fermentation processes and cell-based cocoa to replace their conventional cocoa counterparts. Startup brands, including Planet A Foods, Nukoko, WinWin and Forever Land, incorporate ingredients such as carob and fava beans. They place them in a controlled fermentation process using microorganisms such as lactic acid, bacteria and yeast to ferment the sugars. Kokomodo, Celleste Bio and Food Brewer adopt a process of cell-based cocoa production, using bioreactors to isolate cells from cocoa products and cultivating them in a nutrient-rich environment.
2. Producer initiatives bearing fruit
Amid the cocoa crisis, large-scale confectionery companies are engaging in initiatives to lessen their impact on costs and sales, strengthen their position within the marketplace and secure the future of chocolate production.
In April 2024, Barry Callebaut announced the launch of its Future Farming Initiative (FFI), which seeks to scale sustainable and high-technology chocolate production and navigate the current cocoa crisis to provide chocolate long into the future.
Its release comes after the chocolate giant honed its Forever Chocolate targets – the arm that supports making sustainable chocolate the norm – with many of these revolving around goals for 2025. By this year, Barry Callebaut has committed to seeing 500,000 farmers in its supply chain lifted out of poverty, ensuring its entire supply chain is covered by Human Rights Due Diligence and reaching forest-positive status. By 2030, it states it will have 100% certified or verified cocoa in all its products, which can be traced back to the farm level.
Global chocolatier Nestlé also saw its Nestlé Cocoa plan mark its 15th anniversary in 2024. Launched in 2009, it aims to create better farming, better lives and better cocoa. It operates across 11 cocoa-producing countries and covers almost 179,399 cocoa-farming families. In 2023, Nestlé reported it sourced 85.5% of its cocoa volumes from the Nestlé Cocoa Plan. By 2025, it strives for this figure to reach 100%.
3. Private labels respond to cost-consciousness
With high cocoa prices, brands face a pricing dilemma in supermarkets and retailers. Chocolatiers will need to become inventive to avoid passing on the increased costs to consumers, or if they do, ensure they’re the brand that consumers want to buy.
Following JP Morgan research indicating that the 2024/2025 cocoa crop season is likely to see cocoa prices remain high in the medium term at $6,000 per tonne, confectionery prices are likely to rise in 2025. “We see the chocolate market set for inflation largely unprecedented in recent history,” says Celine Pannuti, head of European staples and beverages at JP Morgan.
Ongoing inflation has led to fatigue among chocolate consumers and the further away from the Covid-19 pandemic we get, the more intolerant shoppers may be on absorbing price hikes. To date, the post-pandemic recovery period has seen a desire for gift-giving, increased impulsive buys at the checkouts and a tendency towards premiumisation. Yet, this may well dwindle in 2025, prompting brands to up their innovations, unique offerings and creative campaigns to stand out and attract consumer spending.
