Consumers can expect some relief from rising chocolate prices with cocoa futures starting to ease after hitting record highs, according to a new international research report by agribusiness banking specialist Rabobank.
In the report 'Chocolate retail prices hit predicted highs – end of surge in sight', the bank’s RaboResearch division found while consumers globally can expect some respite from price increases, retail chocolate prices will remain well above pre-“cocoa crisis” levels, signalling a new normal for the industry.
Chocolate manufacturers and retailers are adapting to this challenging environment, balancing cost recovery with consumer retention, the report said.
RaboResearch agriculture analyst Paul Joules said since 2021, retail chocolate prices globally have surged, driven by a cocoa market in crisis due to poor harvests, crop disease and structural supply issues. And this had also seen higher chocolate prices for New Zealand consumers.
“This has led manufacturers and retailers to expand their value ranges, offering more affordable alternatives to cost-conscious shoppers,” he said.
Paul Joules, Agriculture Analyst, RaboResearch
Manufacturers strategies
Mr Joules said chocolate manufacturers are employing strategies like “shrinkflation” and “skimpflation” to protect margins without losing consumers.
“Shrinkflation involves reducing pack sizes, while skimpflation changes recipes to lower cocoa content, often replacing cocoa butter with cheaper fats or fillers,” he said.
Mr Joules said in some European markets, these changes have altered products to the extent that they no longer meet the legal definition of “chocolate,” forcing brands to update product descriptions.
Worst behind us
Mr Joules said the worst of the “cocoa shock” appears to be over, with cocoa futures expected to fall significantly by mid-2027.
However, he said, global cocoa prices will remain above “pre-crisis” levels due to ongoing structural issues such as aging cocoa trees, crop disease, and climate swings, which means retail prices – including in New Zealand – could be slow to fall.
While chocolate prices are projected to ease gradually, they will still be higher than in 2021, the report says.
Ongoing adaptation
Chocolate manufacturers are adapting to a volatile market by embedding shrinkflation and skimpflation into long-term strategies.
Mr Joules said major industry players are investing in novel cocoa cultivation techniques and cocoa-free innovations to reduce reliance on a single supply chain, aiming to expand choice and build future resilience.
“Technologies such as lab-grown cocoa and precision fermentation are part of this strategic shift,” he said.
“The chocolate market is entering a new era of higher costs and persistent volatility, requiring agility and continuous adaptation from industry players. While the peak of chocolate retail price inflation may be behind us, the pressure remains, and the industry is hedging its bets for a resilient future.”
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