Major chocolate manufacturers are quietly reducing cocoa content in products and reformulating recipes after record cocoa prices triggered one of the industry’s sharpest cost shocks in decades, according to a report by African Export-Import Bank (Afreximbank).
The trade lender said cocoa prices, which surged to nearly $11,000 a ton during the 2024-25 season, forced global confectionery companies to alter product formulations, shrink package sizes and substitute cocoa ingredients with cheaper alternatives to protect margins.
Companies including The Hershey Company, Mondelez International and Barry Callebaut have reduced cocoa solids in some products while increasing the use of vegetable fats and other substitutes, according to the report.
This reflects a mounting strain across the global chocolate industry after poor harvests in key West African producers Ghana and Côte d’Ivoire triggered severe supply shortages and pushed cocoa prices to historic highs.
Afreximbank said elevated prices had already caused “meaningful consumption destruction,” as consumers cut back purchases and manufacturers adjusted product strategies to offset rising costs.
The report said the market has since begun to stabilize, with improved weather conditions and recovering harvests expected to push the global cocoa market into a surplus of between 250,000 and 300,000 tons during the 2025-26 season.
Still, prices remain historically elevated compared with long-term averages, keeping pressure on chocolate producers already facing higher energy, logistics and financing costs.
The cocoa rally exposed the vulnerability of global supply chains to climate disruptions and crop disease in West Africa, which accounts for more than 60% of global cocoa production. Adverse weather, aging farms and the spread of swollen shoot disease sharply reduced output over the past two seasons, tightening global inventories.
The report also warned that weather risks remain significant, with the possible emergence of a strong El Niño pattern (a severe weather condition) later this year threatening renewed volatility across agricultural commodity markets.
For chocolate makers, the supply shock is increasingly reshaping long-term sourcing and manufacturing strategies, with producers investing more heavily in supply diversification, sustainability programs and ingredient reformulation as consumers continue to grapple with higher retail prices.
