FOCUS-As cocoa prices melt down, real chocolate is making a comeback

After a year of smaller ​bars, extra wafers and chocolate alternatives, at least one major chocolate maker is putting ‌the ​cocoa back in — and others may follow suit — as a slump in bean prices since 2024 makes the traditional treat more profitable. The shift — driven by a near 70% slide in cocoa futures from late-2024 records — promises lower shelf prices for consumers, a demand recovery for cocoa farmers, and a partial reversal away from chocolate alternatives made with too little cocoa to qualify as ‌chocolate.

After a year of smaller ​bars, extra wafers and chocolate alternatives, at least one major chocolate maker is putting ‌the ​cocoa back in — and others may follow suit — as a slump in bean prices since 2024 makes the traditional treat more profitable.

The shift — driven by a near 70% slide in cocoa futures from late-2024 records — promises lower shelf prices for consumers, a demand recovery for cocoa farmers, and a partial reversal away from chocolate alternatives made with too little cocoa to qualify as ‌chocolate. U.S.-based confectionery maker Hershey has made public its plans to hike the cocoa content in its chocolate alternatives, which it calls chocolate candy.

After the grandson of the founder of Reese’s criticised Hershey for reformulating some iconic Reese's products into chocolate candy, the company said that from next year, all Hershey’s and Reese’s products will return to their original recipes. Other companies will likely follow suit, said industry participants and experts like independent consultant Roger Bradshaw.

"Absolutely it makes sense to switch back to real chocolate at current cocoa price levels," he said. Snack ‌maker Mondelez did not respond to requests for comment on its chocolate recipes, while Nestle and Ferrero had no immediate comment.

COCOA PRICE SLUMP After cocoa prices nearly tripled to above $12,000 a metric ton in 2024 thanks to adverse weather and disease, chocolate ‌makers began shrinking bar sizes, adding more wafers, fruit and nuts and introducing chocolate alternatives.

They also drew down cocoa stocks, raised prices and ramped up investments in products like ChoViva, a cocoa-free chocolate alternative made from sunflower seeds and oats. The product, developed by German startup Planet A Foods, is sold via its partnership with Barry Callebaut, the world's largest chocolate maker and cocoa processor. That caused a sharp drop in cocoa demand that experts say drove a 70% drop in bean prices from their late 2024 peaks.

Demand could hit nine-year lows in the 12 months to end-September, said Steve Wateridge, a veteran analyst and leading ⁠world expert on ​cocoa. The fall in cocoa prices should, however, lead to a recovery ⁠in demand starting in the second half of the year, he said. "The factors that pushed us to these price lows are all likely to unwind," Wateridge said.

LOWER CHOCOLATE PRICES, MORE COCOA DEMAND It can take 10 months or so for cocoa price changes to filter down to chocolate retail prices because ⁠chocolate makers hedge or lock in purchase prices months in advance and hold large inventories.

Supermarkets and other buyers have, as such, been pressuring chocolate makers to lower prices since around mid-2025. Some have buckled. Mondelez said last month it had trimmed some chocolate prices in Europe and was starting to ​see sales volumes rise.

Barry Callebaut - whose ingredients are used in a quarter of the world's chocolates - expects sales volume to grow between 1% and 5% in the six months through August from a year earlier, according to Reuters calculations ⁠based on the firm’s first-half results. The company, which supplies chocolate for Nestle's Kit Kat bars and Unilever's Magnum ice cream, says that at current cocoa prices, producing chocolate can be cheaper than making chocolate-flavoured alternatives that use vegetable fat rather than cocoa butter.

That's meant that "some customers (are) going back to chocolate," Chief Executive Hein Schumacher said ⁠in ​April, without naming any companies involved. There are also legislative moves driving the pivot back to cocoa in some regions.

In Brazil, the world's sixth-largest per capita consumer of chocolate, a law was signed earlier this month which requires that any products labelled as dark chocolate contain at least 35% cocoa solids. The move brings Brazil closer to markets such as Europe and North America by tightening its cocoa content requirements.

A SLOW RETURN A pivot back to more traditional chocolate would be good news for the nearly 2 ⁠million poverty-stricken cocoa farmers in top growers Ivory Coast and Ghana as it bodes well for cocoa demand and bean prices.

However, it will likely take time to see volumes return to levels seen before the price rally. "I expect it will take ⁠2.5 years to get back to where we were before 2023/24" ⁠in terms of demand, said a veteran cocoa consultant and former trader who declined to be named.

This was due to trends that, while marginal, add up collectively, she said. These include Gen Z being more open to innovations like cocoa-free chocolate, plus the impact of weight-loss drugs on people's eating habits. However, with chocolate makers fearing cocoa prices will rise again, some alternatives are ‌likely to remain.

This is because the products ‌remain profitable in the mass-market segment, noted Jean-Philippe Bertschy, an analyst at Vontobel.