NEW YORK – Anyone who has endured a hard day or week with the consoling thought that “there’s always chocolate” might want to stop reading here. It’s discouraging enough that the cost of chocolate is up nearly 50% over the past three years. But the underlying reason – climate-related decimation of cocoa yields in west Africa, where 70% of the world’s cocoa is harvested – means chocolate prices are just the symptom of an intractable problem.
What’s more, persistent cocoa shortages have pushed chocolate makers – from global GPG giants to startups – to seek alternative ingredients that mimic the flavors of chocolate and that might be offered as chocolate replacements or sustainably substituted into cherished recipes.
The International Cocoa Association puts the global cocoa deficit at a 60-year high of more than 400,000 tons. The deficit drove cocoa futures to a peak of $11,984 per metric ton in late December, up from $2,575 in mid-summer of 2020.
Cocoa futures stood at $8,032 on August 18, according to the International Cocoa Organization, which publishes a daily average of prices in London and New York.
President Trump’s tariffs would push cocoa prices even higher. Hershey Co. in May urged the White House to exempt cocoa from new tariffs. The company said it was expecting a tariff bill of between $15 million and $20 million in the second quarter as it drew down cocoa inventories.
A Halloween candy exemption
If proposed new tariffs remained in place, Hershey said, it could be facing a tariff bill of $100 million in the year’s second half.
“Cocoa cannot be grown in the United States and thus we are engaging with the U.S. government to seek an exemption,” Hershey CEO Michele Buck said in May. Hershey also cited concerns about retaliatory tariffs from Canada, a key player in global cocoa processing.
Hershey announced that the volatile cocoa market left it little choice but to raise prices for its chocolate candies this fall. But the maker of Kisses, Reese’s and Kit Kat bars said it won’t raise prices for its specially packaged Halloween candy this year.
Gourmet chocolatier Lindt raised prices nearly 16% earlier this year. “The development of the global chocolate market in the first half of 2025 was a continuation of what we saw in 2024, with cocoa prices remaining close to record highs." CEO Adalbert Lechner said on the company’s latest earnings call, in July.
Tariffs come and go, but the social and environmental forces affecting cocoa production endure. An “Endangered Aisle” report from the Fairtrade Foundation asserts that western Africa might become too hot for cocoa cultivation within a quarter-century.
Fava beans to the fore
Companies like U.K. startup Nukoko sense an opening for cocoa-free chocolates. The firm is using fermentation technology to produce chocolate-flavored compounds from the fava bean, a temperate-regions crop. The company said its Nukoko powder forms the delicious base for a variety of food and beverage products.
Meanwhile, executives with CPG companies headquartered in the U.S. and Europe are acting as if their businesses depend on solving the complex challenges affecting production of cocoa, the star ingredient in many of the most popular cakes, candies and snacks.
Hershey, Mars and Mondelez International have sustainability programs that help farmers implement climate adaptation strategies that involve planting improved cocoa varieties and diversifying production methods.
Where farmers and their families can prosper
As part of its effort to build a more sustainable snacking company, Mondelez introduced Cocoa Life as its signature program “to lift up the people and restore landscapes where cocoa is growing,” according to chairman and CEO Dirk van de Put. “Now, about 75% of the Cocoa Life communities in west Africa have child labor monitoring and remediation systems in place,” he said in a presentation at the Consumer Analyst Group of New York conference earlier this year.
Cocoa For Good is Hershey’s 12-year, $500 million investment in “contributing to a cocoa supply chain where farmers and their families can prosper.”
Hershey collaborates with scientists, non-government organizations and other stakeholders to tackle the systemic social and environmental challenges faced by cocoa farmers, most of whom live in poverty despite exorbitant prices paid for cocoa beans and chocolate products in the United States and elsewhere.
