Falling cocoa prices won’t necessarily mean cheaper Valentine’s Day chocolates

Cocoa prices have plunged nearly 70% since last Valentine’s Day, but chocolate lovers shouldn’t expect any sweet savings this holiday season or even for Easter treats.

Despite the dramatic drop in cocoa futures, U.S. consumers are still facing chocolate prices that are 14% higher between January and early February compared to the same period last year. This comes on top of a 7.8% increase in 2025, according to data from market research firm Datasembly. The situation is even more pronounced in Europe, where German consumers saw chocolate prices soar by 18.9% in 2025.

The disconnect between falling cocoa prices and stubbornly high retail prices stems from a complex interplay of supply chain dynamics, global demand shifts, and corporate pricing strategies.

Cocoa’s wild ride began in 2024, when insufficient rainfall and crop diseases devastated production in West Africa, which supplies more than 70% of the world’s cocoa beans. As the primary ingredient in all chocolate varieties, the shortage caused cocoa prices to more than double.

Weather conditions have since improved in major producing nations like Ivory Coast and Ghana. Additionally, production has increased in Ecuador and other regions, according to J.P. Morgan analysis, helping to stabilize global supply. However, this recovery coincides with declining global demand as consumers have begun to resist higher chocolate prices.

“Manufacturers have either reduced the amount of chocolate in their products or shifted to alternatives like gummy candies to manage costs,” explains Chris Costagli, a food industry expert at market research firm NIQ.

U.S. retail data reveals the impact on consumer behavior. While chocolate sales revenue rose 6.7% in 2025 compared to the previous year—largely due to price increases—the actual volume of products sold declined by 1.3%, indicating consumers are purchasing less chocolate overall.

Tariff policies have added another layer of complexity for American chocolate lovers. The Trump administration implemented tariffs averaging 15% on cocoa-producing countries in February 2025, further driving up U.S. import costs. Though these tariffs were removed in November for cocoa and other commodities that can’t be grown domestically, tariffs of 15% or more remain in place on European chocolate products.

Industry experts compare the lag between raw material prices and retail prices to what consumers experience with gasoline. “Even when oil costs decrease, pump prices don’t immediately follow because companies need to use up inventory purchased at higher prices,” Costagli notes.

Major manufacturers like The Hershey Company typically operate on long-term contracts that may require them to pay more than current market rates. Additionally, the volatile nature of commodity markets means companies remain cautious about lowering prices when future supply disruptions could drive costs back up.

There’s also a strategic element to pricing decisions. “If customers continue to pay higher prices, companies have little incentive to reduce them,” Costagli points out.

Some adjustment is occurring in specific markets. Mondelez International, which owns brands like Cadbury, Toblerone, and Oreo, raised global prices by 8% in 2025 to offset higher cocoa costs. In Europe, where price increases were steeper, the company experienced significant sales volume decreases, prompting them to lower prices in markets like the UK and Germany.

“We’ve learned that certain price points are very important,” Mondelez CEO Dirk Van de Put acknowledged during a February investor call. However, he indicated no immediate plans for price reductions in North America, where both price increases and sales volume losses have been more moderate.

Interestingly, two segments of the U.S. chocolate market bucked the downward trend in 2025: value brands and super-premium brands. Companies behind luxury labels like Ferrero Rocher, Justin’s, and Lindt Excellence implemented less aggressive price increases since their products were already positioned at higher price points.

“As mainstream chocolate makers raised prices, some consumers decided to spend just a little more for what they perceived as better quality,” Costagli explains. “It gave aspirational shoppers the push they needed to trade up for organic, fair trade, or other premium characteristics.”

Simultaneously, value brands like Whitman’s and store-brand chocolates saw increased sales as price-sensitive consumers traded down from mainstream options.

“The savings from trading down is greater than before,” Costagli notes. “From an aspirational perspective, it’s easier to trade up, and for the financially insecure, trading down saves more money.”