After two years of record cocoa costs, major chocolate makers say relief may finally be coming.
Mondelez International and Hershey told analysts on recent earnings calls that cocoa prices are expected to stabilize or decline next year, reducing pressure to keep raising candy prices.
“It’s certainly going to be positive, even if cocoa is trading at [a] level that is quite higher compared to historical norms,” Mondelez CFO Luca Zaramella said.
Hershey said the improving outlook allowed the company to raise its 2025 net sales growth projection to about 3 percent. CFO Steven Voskuil told analysts that, while cocoa costs remain elevated, the trend is shifting.
“I would hope as we get deeper into 2026, we’d start to see some deflation,” Voskuil said.
According to the Bureau of Labor Statistics, candy remains one of the food categories most affected by inflation, with confectionery prices through September up nearly 10 percent from the same period last year.
From shortage to surplus
This optimism marks a sharp change from the past two years, when cocoa prices soared to historic levels. Climate-related heat, drought, and disease devastated cocoa yields in West Africa, which produces about 70 percent of the world’s cocoa. The global deficit reached a 60-year high, driving cocoa futures close to $12,000 per metric ton in late 2024.
The International Cocoa Organization now estimates that supplies will shift from a deficit of nearly 500,000 metric tons last year to a surplus of approximately 150,000 tons, supported by improved weather conditions in key producing regions, such as West Africa and Ecuador.
“Global production for the upcoming crop year is projected to increase,” said David Branch, senior vice president with Wells Fargo’s Agri Food Institute. “Given this turnaround with cocoa supply, cocoa futures have dropped from historic highs.”
Tariffs and long-term risk remain
During the worst shortages, candy companies also faced potential tariff costs. Hershey warned earlier this year that new import tariffs could add up to $100 million in expenses, noting that cocoa cannot be grown domestically. Hershey and other chocolate makers pushed for tariff exemptions and raised prices on most chocolate products.
Even if cocoa prices decline next year, companies warn that retail candy prices are unlikely to return to pre-inflation levels.
“At the moment, it’s not easy to price in the U.S.,” Mondelez CEO Dirk Van de Put said.
Long-term, the challenges that drove cocoa prices to record highs still persist. The Fairtrade Foundation has warned that parts of West Africa could become unsuitable for cocoa farming within 25 years due to rising temperatures. Major confectionery companies are investing in climate resilience and support programs for farmers to ensure future supply stability. Mondelez’s Cocoa Life program now operates in most of its cocoa sourcing communities, while Hershey’s Cocoa For Good initiative promotes better farming practices and community development.
For shoppers who paid more for Halloween candy this year, lower cocoa prices might start appearing on shelves by next fall. But the industry is clear: 2026 may bring relief, not a full reset.
