Cocoa prices soared to record highs in early 2024, surpassing the $10,000 per metric ton mark for the first time ever on March 26^th. Although prices have fluctuated since then, they remain markedly elevated compared to historical averages on account of supply constraints and other factors (e.g., logistics and infrastructure). Because many chocolate companies hedge cocoa purchases up to a year in advance, elevated prices can keep on-shelf chocolate costs high after prices soften. 

Chocolate is no longer an everyday product, but is becoming a luxury product in its own right. Brand names in the food industry source single-origin beans from renowned growing regions, refining their confections through lengthy conching and tempering processes, and packaging them in artful, collectible boxes. The cocoa manufacturer processes raw cocoa beans into different forms, such as cocoa powder, chocolate liquor, or cocoa butter, which are then used to create chocolate products. 

In spite of widespread media coverage of cocoa supply issues, consumer awareness is surprisingly low. A Numerator Verified Voices survey discovered that roughly 54% of consumers remain oblivious to the supply crisis, with 75% indicating no perceived alterations in product quality or taste profiles. The vast majority of them don’t intend to change their chocolate purchasing habits, but they might be forced to consider alternatives. 

Consumers are adapting to high chocolate prices in several key ways: 

Switching To A Different Chocolate Brand 

Most consumers acknowledge that chocolate prices are rising and are willing to explore new brands, especially those that offer better value. Consequently, private label chocolate sales have increased by 30% year-on-year, now viewed as approaching parity in terms of quality. These products are specifically manufactured for a single retailer (i.e., a supermarket) rather than a large producer, which has significant input into design, formulation, and packaging. Supermarket chains such as Tesco in the UK have recently released new chocolate ranges. 

Opting For An Alternative Sweet Snack

For some consumers, prices have become too high, and chocolate is a luxury treat, so they will reduce their overall consumption. What used to be a common treat is now purchased less often or in smaller quantities, and other indulgence categories could benefit from those consumers. Examples include but aren’t limited to fresh fruit, peanut butter, and ice cream. As basic chocolate is becoming more expensive, brands market it more as a luxury good, drawing attention to artisanal methods, the origin of beans, ethical sourcing, and rare flavors. 

Visiting Another Store To Find Their Preferred Chocolate 

The key factors that influence chocolate purchasing decisions include chocolate type (extra dark, dark, milk, white, or varieties with added ingredients), brand, aroma and taste, and price. Swiss and Belgian consumers prefer smooth, richer chocolate, whereas American consumers tend to enjoy sweeter chocolate. When facing availability issues, consumers switch stores to find their preferred chocolate, that is, they’re willing to go out of their way to find a specific brand or product. 

A substantial number of consumers are actively seeking promotions and discounts to offset the higher costs, which makes them feel smart and confident in their shopping. There’s no guilt or shame in buying a chocolate product when it’s 50% off. If a product is seasonal (e.g., Easter, Christmas, Valentine’s Day), limited edition, or hard to find, consumers are more motivated to seek it elsewhere. A smaller segment of customers purchase chocolate in bulk to achieve cost savings. 

Trading Down 

Chocolate prices are expected to continue rising in the near future, and some consumers may trade down from premium or artisanal chocolate to mass-market options. It’s not about cutting costs. Consumers actively seek the best overall value, weighing quality, features, and price before making a purchase decision. Digital tools, such as price comparison apps and websites, online reviews, and coupon platforms, make value signals more transparent than ever. Consumers swap premium bars for mid-tier brands or buy smaller pack sizes to reduce out-of-pocket spend. 

What Are The Implications For Chocolate Markers? 

Some chocolate makers are struggling to afford cocoa, which is too expensive, and prices are so volatile that it’s almost impossible to make any long-term plans. According to ofi, buying cocoa wholesale is generally more affordable per unit, as these purchases allow for bulk discounts due to reduced packaging, handling, and transportation costs for the supplier. Chocolate manufacturers may produce less product or dramatically increase prices, which can lead to a lack of high-end chocolate for sale. 

Many brands are adjusting recipes by using less cocoa in their products, focusing on other ingredients, including caramel and nuts, even if they lead to perceived changes in quality or taste. The size of chocolate bars has decreased in recent years due to shrinkflation to keep retail prices down. Needless to say, many consumers feel deceived or cheated when they realize the product is smaller, especially when the packaging looks the same. 

To navigate this landscape, companies should: 

1. Clearly Explain Why Chocolate Prices Are Increasing 

Consumers prioritize honesty and transparency, so chocolate brands should explain the reasons behind rising prices. If prices go up all of a sudden, people will naturally assume it’s corporate greed, not necessity, so they must become aware of inflation, cocoa shortages, and global supply chain issues. Brand trust is crucial for shoppers, making them more likely to buy premium products and recommend companies they value. 

2. Offer Tiered Pack Sizes And Value‐Added Promotions

Offering a variety of sizes – single-serve, standard bar, multi-packs/family size, premium -helps meet different consumer needs and budgets. With value-added promotions, consumers have the impression they’re getting more for their money, especially during inflationary times. Bundled flavors or mix boxes serve as positive models. 

3. Monitor Shopper Sentiment To Anticipate Shifts Before They Erode Demand

By understanding how shoppers feel, chocolate makers can identify areas for improvement, tailor marketing efforts, and even predict potential issues/opportunities. For example, they can anticipate shifts in flavor and format preferences or respond to ethical and sustainability demands. 

Concluding Remarks 

Although chocolate remains a beloved indulgence, its status as an affordable treat may be shifting for many. Consumers employ a wide range of strategies, from switching to cheaper alternatives to accepting premium pricing for quality chocolate, to navigate these tough times. Brands that prioritize transparency, offer strategic value, or innovate with alternative ingredients drive loyalty and growth.