Market Data 
Cocoa prices are surging so high, the Easter Bunny might want to hoard its chocolate.
Consumers hunting for Easter eggs and chocolate bunnies this year can expect sticker shock similar to Valentine’s Day. Retail chocolate prices rose 11.6% across all of 2023, according to Circana data shared with CNN, outpacing the 3.4% annual rise in the overall Consumer Price Index, a common measure of inflation.
That’s in large part because the price of cocoa – a key ingredient for chocolate – has spiked. Poor climate and crop diseases in West Africa – home to 70% of global cocoa production – have tightened supply and caused prices to skyrocket.
Cocoa futures have more than doubled since January, hitting a record high of $10,000 ahead of the chocolate-heavy Easter holiday. That’s a 250% increase from last March, outpacing recent surges in Bitcoin and gold.
And while chocolate sales the two weeks around Easter hit $925 million last year, according to data from NielsenIQ, experts wonder how long the growth can last as the cost of cocoa continues to soar.
As prices rise, some chocolatiers are exploring cost-cutting alternatives, like diversifying their products to depend less on cocoa. The companies are fighting to hold on to consumers tempted to defect from chocolate in favor of jelly beans, salty snacks or other rival treats.
Hershey’s, for example, has announced Easter products including Cadbury Caramello miniature chocolates which feature a caramel fill, a lemon crisp KitKat and an Easter candy assortment with Haribo gummy bears.
In February, Hershey’s announced a new marketing partnership with Shaquille O’Neal to promote its gummy products, and CEO Michele Buck said the company plans to scale its gummy capacity up by 50% in 2024.
Some food companies might venture into gummy products at Easter to compensate for the high cost of cocoa, Billy Roberts, senior economist at CoBank, told CNN.
Dollar sales for non-chocolate and gummy products saw a 12.1% increase across 2023, outpacing chocolate, which saw a 5.8% increase in dollar sales, according to the NCA.
US retail unit sales for chocolate decreased 5.3% across the same period, according to Circana, reflecting less buying from consumers while elevated prices boost sales.
Roberts said consumers can continue to expect rising prices, as the current surge in cocoa will directly impact retail prices closer to Halloween.
“Brands are looking at diversifying, to make sure to almost kind of hedge their bets a little bit about what happens if chocolate consumption really starts to deteriorate,” Roberts said.
Issifu Issaka, who leads a cocoa farmers association in the Western North Region of Ghana, said investment in cocoa production is desperately needed as farmers face erratic weather and a struggling industry.
Ghana and Ivory Coast are responsible for over 60 percent of global cocoa production, yet both nations are anticipating a reduction in their cocoa production due to adverse weather conditions, according to Will Kletter, VP of operations and strategy at Silicon Valley start up ClimateAi.
In Ghana, heavy rainfall has spurred black pod disease and swollen shoot virus, damaging cocoa crops. In Ivory Coast, cocoa production from April to September is projected to decline by 25% to 30% compared to last year, due to unseasonal rain, dry spells and strong winds, Kletter said.
Alongside climate risks, Issaka said farmers are facing increased costs of production, while earnings have remained flat. Industries like illegal mining have piqued the interest of farmers looking to make quick money. Yet mining often destroys farms and the possibility of a livelihood in cocoa production, Issaka said.
In Ghana, the price paid to farmers – the farm gate price – is set by the government. As farmers advocate for a higher farm gate price, concerns about supply remain.
According to a February 2024 report from the International Cocoa Organization, cocoa arrivals at ports in Ivory Coast and Ghana declined 28% and 35%, respectively, compared to the previous season.
The high futures prices reflect uncertainty about the viability of the cocoa industry, Paul Joules, commodity analyst at Rabobank, told CNN.
“The market is clearly in a state of panic as it comes to terms with the structural supply issues the cocoa industry is facing,” Joules said.
Meanwhile, consumers continue to demand chocolate sweets. Confectionery sales in the US reached $48.8 billion across 2023, and chocolate sales contributed $25.9 billion to that, according to the NCA. Confectionery sales are expected to hit $61 billion by 2028.
Joules said the factors underpinning long-term cocoa supply issues – crop disease, low farm gate prices, farmers exiting cocoa and aging trees – “are by no means a quick fix.”
Lindt & Sprüngli, a purveyor of high-end chocolates, told CNN in an email that “the price hike in cocoa will require further price increases in 2024 and 2025, assuming that cocoa prices remain at current levels.”
Prices for Nestlé chocolate products increased 7.2% across 2023, according to a Nestlé spokesperson. “Given the persistently high cocoa prices, it may be necessary for us to make responsible adjustments to pricing in the future,” the spokesperson wrote in an email. NielsenIQ data shows the average retail price for chocolate goods rose every Easter for the past five years, hitting $3.06 in 2023, up 38% from 2019.
And Hershey’s CEO Michele Buck said on the company’s quarterly earnings call in February that the company would use “every tool in our toolbox, including pricing, as a way to manage the business.”
Major manufacturers aren’t the only ones feeling the pinch. Peng Xu, co-owner of The Chocolate House, an artisanal chocolatier in Washington, DC, told CNN that price increases for craft chocolate are often due to inflationary pressures like labor costs, though unprecedented cocoa prices are posing a potential concern.
Christopher Taylor, co-owner of Li-Lac Chocolates, which has served Manhattan for over 100 years, told CNN that high-quality chocolatiers are facing unprecedented cost-cutting initiatives.
To break even, Taylor said Li-Lac would have to consider a price increase of 30%. Yet a spike like that isn’t feasible for customers, he said, meaning the business will have to incur costs.
“We’re in full cost cutting mode,” he said. “We’re doing some price increases, but the customers just don’t want more price increases, so you know, we’re very careful in that regard. So, we just have to take it and cut costs where we can.”
For Easter, consumers have other options, if chocolate prices put them off: Sales of Peeps in the US are expected to cross 100 million units this holiday, according to Euromonitor International.
But for the chocolate industry, the outlook is dire.
“It’s going to be brutal,” Taylor said. “There’s no sugarcoating it.”
