Key Takeaways:
(Bloomberg) -- Cocoa prices have collapsed to below $2,900 a metric ton in February, a dramatic reversal from the highs of around $12,000 seen in late 2024, after disease and dry weather decimated production. The extreme volatility is forcing major chocolatiers to reformulate products and seek cocoa alternatives to shield themselves from price shocks.
"What we hear from companies is that, though there was backlash on social media, people aren’t giving backlash with their wallets," Oran van Dort, a cocoa analyst at Rabobank, said. As a result, some chocolatiers are in no rush to add more cocoa back into products, with some still working through expensive stockpiles.
The impact of the price swings is evident in recent corporate earnings. Barry Callebaut, one of the world's largest cocoa processors, saw its cocoa sales volumes fall 14.3% year-over-year for the half-year ending Feb. 28, while its global chocolate sales volumes declined 5.1%. The Swiss company's shares plunged 16% after it warned that recurring operating profit for the fiscal year would decline by a mid-teens percentage, a sharp reversal from its previous expectation of an increase. Similarly, Hershey recorded mark-to-market losses on its commodities trading of $423 million in 2025, while Mondelez faced a pre-tax loss of $984 million on its commodities contracts.
The turmoil is accelerating a shift toward cocoa alternatives. Global packaged foods giant Nestle has reformulated its Toffee Crisp and Blue Riband recipes in the U.K. to the point where they no longer meet the 20% minimum threshold for cocoa solids to be legally called 'chocolate'. The Swiss company has also partnered with Germany’s Planet A Foods to create a chocolate-like product from fermented sunflower seeds and oats. Meanwhile, Mondelez-backed Israeli start-up Celleste Bio announced it has produced chocolate bars from cells grown in a lab.
This article is for informational purposes only and does not constitute investment advice.
