Rising cocoa prices: Impact on consumers and the food industry

Cocoa prices are soaring worldwide, creating significant challenges for both consumers and the food industry.

But what’s behind this crisis? How are manufacturers adapting? And what does this mean for the chocolate products we all love? This article explores the key factors driving the cocoa crisis, its impact on consumers and manufacturers, and the potential solutions emerging from the industry. 

Why are cocoa prices rising?

The current cocoa crisis stems from a combination of environmental, economic, and ethical challenges that have drastically affected supply and costs. 

Declining cocoa production

One of the primary factors is declining cocoa production. Aging cocoa trees are producing lower yields, and the slow replanting rates in cocoa-producing regions are unable to keep up with rising demand. In addition, the persistent issue of swollen shoot disease continues to devastate cocoa crops, further reducing the global supply. 

Climate change

Climate change has also taken a significant toll on cocoa farming. Unpredictable weather patterns are disrupting traditional growing conditions, making cocoa farming less reliable. Prolonged droughts in key cocoa-producing regions like Ghana and Côte d’Ivoire have crippled output, while stricter deforestation regulations, though necessary for environmental protection, are limiting the land available for cocoa cultivation. 

Ethical and sustainability concerns

Another pressing issue is the ethical and sustainability concerns that plague the cocoa industry. Many cocoa farmers earn extremely low wages, leaving them unable to invest in sustainable farming practices, which exacerbates the problem of low yields. Additionally, unethical practices such as child labor and illegal mining persist in some cocoa-growing areas, further complicating efforts to create a sustainable and transparent cocoa supply chain. 

New regulations

Finally, new regulations, such as those introduced in Europe, require manufacturers to source “deforestation-free” cocoa. While these rules aim to reduce greenhouse gas emissions and protect biodiversity, they add complexity and cost to cocoa supply chains.

Despite rising prices, cocoa-based products are thriving

Interestingly, even as cocoa prices surge, consumer demand for cocoa-based products continues to grow. From 2020 to 2024, the number of new cocoa-based product launches increased at a compound annual growth rate of 4.8%. This growth demonstrates that despite rising costs, consumers remain deeply attached to the unique taste of cocoa. 

Europe leads the market for cocoa-based products, accounting for nearly half of all new product launches in 2024. Meanwhile, regions like Asia-Pacific, Latin America, and the Middle East and Africa are also showing strong growth. North America, however, is the only region where the number of cocoa-based product launches has slightly declined. 

These trends highlight the ongoing consumer demand for cocoa-based products, even as they face higher prices. However, this demand puts even more pressure on manufacturers to innovate and adapt to the changing market landscape. 

What does the cocoa crisis mean for consumers and manufacturers?

Consumers directly affected by rising cocoa prices

cocoa crisis impact consumers

Interestingly, even as cocoa prices surge, consumer demand for cocoa-based products continues to grow. From 2020 to 2024, the number of new cocoa-based product launches increased at a compound annual growth rate of 4.8%. This growth demonstrates that despite rising costs, consumers remain deeply attached to the unique taste of cocoa. 

Europe leads the market for cocoa-based products, accounting for nearly half of all new product launches in 2024. Meanwhile, regions like Asia-Pacific, Latin America, and the Middle East and Africa are also showing strong growth. North America, however, is the only region where the number of cocoa-based product launches has slightly declined. 

These trends highlight the ongoing consumer demand for cocoa-based products, even as they face higher prices. However, this demand puts even more pressure on manufacturers to innovate and adapt to the changing market landscape. 

Rising cocoa prices force manufacturers to adapt

The cocoa crisis presents several risks for food manufacturers. Rising costs are forcing companies to raise product prices, which may lead to reduced consumer demand, particularly for premium chocolate products. At the same time, to manage costs, some manufacturers may lower the cocoa content in their recipes. While this approach can reduce expenses, it risks compromising the taste and quality of their products, potentially alienating loyal customers. 

Additionally, manufacturers face supply chain uncertainty. Declining cocoa production, ethical concerns, and stricter sustainability requirements make it challenging to ensure a consistent supply of high-quality cocoa. This vulnerability to supply disruptions is a significant concern for companies relying heavily on cocoa as a key ingredient. 

Ethical and sustainability pressures are also mounting. Consumers are increasingly demanding transparency and accountability in cocoa sourcing practices. Issues like deforestation, child labor, and underpaid farmers can damage brand reputations if not addressed effectively. 

cocoa crisis impact food manufacturers

How can manufacturers adapt to the cocoa crisis?

In the face of these challenges, food manufacturers must adopt innovative strategies to navigate the cocoa crisis while maintaining consumer trust and satisfaction.

Reducing cocoa content to keep costs down.

One approach is to reformulate products to reduce costs without sacrificing quality. Some companies are lowering the cocoa content in their recipes or reducing product sizes while maintaining price points, a strategy known as shrinkflation. While effective, this tactic must be implemented with transparency to avoid consumer backlash. 

Turning to other alternatives.

Another solution is to explore alternatives to cocoa. For example, manufacturers can use yeast-based ingredients to replace up to 40% of cocoa powder without compromising taste or texture. Other alternatives, such as cocoa butter replacers or plant-based proteins, offer functional benefits but require careful formulation to maintain product appeal. 

Creating new value for consumers

Finally, manufacturers can focus on creating new value for consumers. By emphasizing sustainability, health benefits, and premium quality, they can justify higher prices and build stronger connections with their customers. Storytelling and transparency about ethical sourcing practices and sustainability efforts can also enhance brand loyalty during this challenging time. 

Biospringer by Lesaffre offers a premium solution for cocoa reduction with yeast-based ingredients

As cocoa prices rise, yeast-based ingredients offer an innovative and cost-effective alternative for food manufacturers. These ingredients allow companies to reduce cocoa powder usage by up to 40% without compromising taste and color.

Unlike other substitutes, yeast-based ingredients deliver a clean, rich cocoa flavor with no off-notes, ensuring a consistent and superior sensory experience. They are produced through natural fermentation, requiring no agricultural land, making them a sustainable and ethical choice. 

By incorporating yeast-based ingredients, manufacturers can reduce costs, maintain clean-label status, and align with consumer demands for natural, eco-friendly products. This solution provides a pathway for manufacturers to navigate the cocoa crisis while continuing to delight their customers. 

Yeast extract for cocoa reduction

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