Cocoa prices are falling. So why is chocolate still so expensive?

Cocoa prices are starting to ease after a record high, but don’t expect the candy to get cheaper just yet, as the world’s biggest chocolate makers turn to social media-inspired products and other strategies to win back shoppers.

Cocoa prices have hit record highs over the past two years, driven by adverse weather conditions and poor cocoa harvests that have pushed up chocolate prices and dampened consumer sentiment.

However, the price of cocoa now seems to be falling.

Cocoa futures last traded at $5,327 per ton and are down 34% over the past year. The commodity has risen to nearly $12,000 per metric ton in late 2024. Over the past two decades, cocoa prices have typically hovered around $2,000 to $3,000.

Swiss chocolate giants Barry Callebaut, Lindtand Nestlé everything noted that rising cocoa prices are holding back profits.

Lindt said on Monday that a group-wide price increase of 11.8% led to chocolate sales are down 7.5% fewer customers bought chocolate in the first half of the year.

“Record cocoa prices have prompted unprecedented price increases across the industry, while geopolitical uncertainty, inflation and weak consumer sentiment weighed on demand,” group CEO Adalbert Lechner said in an analyst call. “The crisis in the Middle East has added another headwind to the weak flow of tourism from Asia and the Middle East to Europe.”

The world’s largest supplier of chocolate and cocoa, Barry Callebaut, said that while global consumers buying 4.4% less chocolate In the third quarter, the company’s total sales rose 5.7% in the quarter compared to the same period last year, turning positive for the first time in more than two years. In addition, global cocoa sales increased by 18% due to the market correction earlier this year.

Meanwhile, food and drinks maker Nestlé said higher cocoa and coffee prices weighed on its core trading profit in the first half, falling 2.8%. The company’s confectionery business accounts for 9.7% of total sales. Nestlé expects to benefit from falling cocoa prices.

Volatility in cocoa prices was mainly due to poor cocoa harvests in West Africa, exacerbated by weather related A child and climate change leading to supply shortages.

El Niño is a weather phenomenon with above-average temperatures that occurs every two to seven years in the Pacific Ocean. The sharp rise in cocoa prices in 2024 was mainly due to a According to data December analysis Dr Tanya Lander, researcher at the Oxford Martin School’s Future of Food Programme.

“Thus, it is not surprising that El Niño weather has been associated with poor cocoa harvests in both Ivory Coast and Ghana (which produces 60-70% of the world’s cocoa beans),” Lander wrote.

Climate change and rising temperatures also play a role, and 2024 is the year the hottest year on the record. Recent heatwaves across Europe may also dampen consumer enthusiasm for chocolate, UBS analysts said in a note on Lindt in early July.

Heat and rising temperatures in some of Lindt’s core European markets could affect demand for chocolate, with sales in Europe, excluding Eastern Europe, falling in the four weeks ended June 14, analysts said.

However, Barry Callebaut said that while a strong El Niño has been confirmed in 2026 and 2027 and poses a risk of reduced supply, the large surplus in 2025-26 acts as a buffer, leaving 2023-24 a very different picture.

Analysts at UBS expect Lindt to hedge against favorable cocoa bean prices in 2027, which they estimate could cut costs by 500 million Swiss francs.

Meanwhile, the President of the United States Donald Trump’s Reciprocal Tariffs also had a brief but significant impact, causing price spikes and supply chain disruptions. More recently, the conflict in the Middle East has also hit Lindt’s travel retail business worldwide, reducing tourist flows.

Cocoa prices are expected to recover, and chocolatiers are looking to win back their core customer base by innovating their premium product formats, as well as keeping a closer eye on social media trends that youth engage with.

In December 2024, Lindt launched a Dubai-style chocolate bar in an effort to capitalize on a viral social media trend. Global retailers from Walmart to trader joe’s Shake Shackand Harrods now also sells Dubai chocolate.

Lindt CEO Lechner said the company plans to expand its “social media presence” to create a seamless journey between inspiration, discovery and purchase.

“The extraordinary success of our Dubai-style chocolate launch demonstrated the growing power of social media in driving awareness, engagement and demand for our brands,” Lechner said in the earnings call.

“This strategy helps us attract new audiences and increase our visibility among younger consumers.”

Nestlé CEO Philippe Navratil echoed that sentiment, saying on a call with analysts on Thursday that the company plans to invest more in influencer marketing with changes to how the brand promotes itself.

“More digital, more social, more organic, more fun. Studying how young consumers interact with the world,” Navratil said.

Both Barry Callebaut and Lindt are focusing on consumer interest in premium products in the remaining half of the year, but they are being creative in how they offer products rather than increasing prices.

“By expanding our pricing architecture, we can attract new consumers, increase purchase frequency and offer more touch points with the Lindt brand without compromising our premium positioning,” said Lechner.

Lechner noted that Lindt had selectively cut prices in key markets such as Germany and Switzerland, particularly around Christmas, to support consumer demand during the most important season. Meanwhile, Barry Callebaut and Nestlé are not talking about lowering prices.

Instead, Barry Callebaut is also leaning towards premium chocolate, growing its Gourmet business, which supplies chefs and bakers, while expanding its premium specialty chocolates.