Cocoa prices have climbed drastically over the past few years, nearing all-time highs and subsequently elevating chocolate prices.
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This Valentine’s Day, luxury chocolates like bonbons and truffles are even pricier.

For the third consecutive year, cocoa yields have fallen short due to unusual weather conditions, pushing cocoa bean prices so high that chocolate manufacturers are compelled to increase their prices.

“It’s been a significant shift in our business model,” remarks Alex Whitmore, who operates Taza Chocolate, a manufacturer based in the Boston area.

The focus at Taza Chocolate is primarily on bars, but also includes Mexican-style chocolate, chocolate-covered nuts, and barks. Due to their emphasis on richer, cocoa-heavy chocolate, Whitmore has seen a considerable hike in cocoa bean costs.

“Our cocoa expenses have nearly tripled,” he reports. “We raised prices by about 15%, and although we might have to do it again, we’re striving to maintain stability.”

Major chocolate corporations such as Nestlé, Hershey, and Mondelēz, the producer of Cadbury and Milka, have also raised their prices, indicating potential further increases in the upcoming year.

A Severe Cocoa Shortage

According to David Branch, an agricultural analyst at Wells Fargo, global cocoa supplies are experiencing the most significant deficit in 60 years.

This shortage is primarily due to West Africa—especially Ivory Coast and Ghana—being the main sources of global cocoa. Farmers in that region are contending with extreme weather variations and declining tree health.

“There have been episodes of excessive moisture, followed by extreme heat and dryness,” Branch explains. “Such fluctuating weather stresses older cocoa trees, making them prone to disease.”

Recent crop results reveal a 13% drop in cocoa production compared to last year, marking three consecutive years of decrease.

“While we’re starting to see improvements in delivery times,” he adds, “the recovery will take time.”

Last Valentine’s Day, cocoa pricing hit a 47-year high, and it has nearly doubled since then.

The financial uncertainty has attracted many speculators looking to benefit from large price fluctuations, further escalating instability.

Navigating the Cocoa Crisis

Consumers do not appear overly discouraged; chocolate sales continue to increase, notwithstanding rising prices.

“For many, chocolate remains an indispensable indulgence,” says Mondelēz CEO Dirk Van de Put in a recent statement to investors.

Fortunately, the market is gradually correcting itself.

Bakeries and other businesses that don’t strictly need chocolate are now exploring alternative flavors. Major manufacturers are directing customers toward chewy, gummy, or other less cocoa-intensive sweets. KitKat has even introduced new flavors like cinnamon toast and Neapolitan, minus the chocolate coating.

Farmers beyond West Africa are increasing cocoa production, with countries like Ecuador planting new trees that will yield more cocoa in a few years, Branch notes.

“We will eventually see improvement,” he predicts. “It’s just not a quick solution.”

Importantly, higher cocoa prices provide resources for West African farmers to enhance their operations—cultivating younger trees and strengthening older ones, which could make cocoa supply more sustainable in the future.

According to Whitmore at Taza Chocolate, “The cocoa pricing is a reaction to years of inadequate investment in the sector. This shift is necessitated by the long period of low prices that led to underinvestment, and we’re now experiencing the consequences.”