Cocoa Price Crash Prompts Hershey to Bring Back Classic Chocolate Recipes
HersheyHSY plans to restore cocoa-based recipes across all Hershey's and Reese's products starting next year, after cocoa futures fell roughly 70% from record highs set in late 2024, according to Reuters.
Cocoa prices nearly tripled to above $12,000 a metric ton in 2024 after adverse weather and disease hammered supply.
That spike pushed chocolate makers to shrink bar sizes and load products with more wafers, fruit, and nuts.
Some companies developed cocoa-free alternatives, including ChoViva, a product made from sunflower seeds and oats by German startup Planet A Foods, sold through a partnership with Barry Callebaut, the world's largest chocolate maker and cocoa processor.
The shift to cheaper formulations, combined with sharp inventory drawdowns, is what industry experts say drove the subsequent price collapse.
Cocoa demand could hit nine-year lows in the 12 months ending September 2026, per veteran analyst Steve Wateridge.
The rebound in cocoa use is also being driven by straightforward economics.
Barry Callebaut says producing real chocolate is now cheaper than making alternatives that swap cocoa butter for vegetable fat.
"Some customers (are) going back to chocolate," Chief Executive Hein Schumacher said in April.
Barry Callebaut supplies ingredients for Nestle's Kit Kat bars and Unilever's Magnum ice cream, and expects sales volume to grow between 1% and 5% in the six months through August compared with a year earlier.
Independent consultant Roger Bradshaw was direct, saying it "absolutely makes sense to switch back to real chocolate at current cocoa price levels."
Consumer Prices Won't Fall Immediately
It takes roughly 10 months for cocoa price changes to reach retail shelves because manufacturers hedge purchases months in advance and hold large inventories.
Supermarkets had been pushing chocolate makers to cut prices since mid-2025, and MondelezMDLZ said recently it had trimmed some European chocolate prices and was beginning to see sales volumes recover.
Full demand recovery will take considerably longer.
One veteran cocoa consultant told Reuters she expects it to take 2.5 years before demand returns to pre-2024 levels.
Headwinds include younger consumers' openness to cocoa-free products and the impact of weight-loss drugs on eating habits, per the same report.
Brazil added legal weight to the cocoa recovery this month by signing a law requiring dark chocolate to contain at least 35% cocoa solids, bringing it closer to European and North American standards.
The legislation is welcome news for the roughly 2 million cocoa farmers in Ivory Coast and Ghana, though a sustained recovery in bean prices remains years away.
Chocolate alternatives aren't disappearing entirely.
Analyst Jean-Philippe Bertschy at Vontobel noted the products remain profitable in the mass-market segment, and manufacturers still wary of another cocoa price spike are unlikely to abandon them outright.