After skyrocketing to record highs due to poor West African harvests, cocoa prices are now tumbling as worries over weakened demand have begun to outweigh concerns of supply shortages.
Futures reached their lowest point since early December, decreasing by as much as 10%, according to Bloomberg – and while the initial surge had prompted chocolate makers to raise prices, the market is now bracing for potential shifts in light of recent changes in consumer behavior.
However, these developments haven’t stopped industry giants like Hershey or Mondelez from increasing prices – and more hikes are anticipated, according to statements made by their top executives in separate presentations at the Consumer Analyst Group of New York conference in mid-February.
CFO Steve Voskuil said the bulk of Hershey’s U.S. confectionery products saw “double-digit price increases” in 2024, while Mondelez CEO Dirk Van de Put noted that his company is monitoring demand amid “significant price increases” and predicts U.S. consumers may pay up to 50% more for their chocolate in the near future.
Although Van de Put doesn’t expect sales volumes or chocolate cravings to waver anytime soon, industry analysts at JPMorgan Chase & Co. recently predicted that cocoa demand will decrease by at least 1.8%.
As the chocolate industry grapples with volatility, the search for more sustainable and affordable cocoa alternatives has ramped up.
Made Whole
Founded in 2018, Blue Stripes adopts a unique approach to resolving the cocoa crisis: utilizing the entire cacao pod via upcycling methods instead of the traditional 30% – and tripling the crop’s value in the process.
“The whole cacao fruit is an incredible superfruit with boundless functional benefits that exist in every part: the beans, the fruit (pulp around the beans), and the shell,” co-founder Oded Brenner told The Food Institute.
This approach has paved the way for innovative products like Cacao Water and Cacao Superfruit Gummies that are packed with functional perks, as they retain much of the dietary fiber from the shell and repurpose the fruit’s unrefined sugar as a natural sweetener.
The method also preserves the superfood’s natural electrolytes and antioxidants – and it’s equally beneficial for farmers and the environment.
“By upcycling the cacao fruit waste, farmers can increase their revenues without growing additional trees,” Brenner told FI.
“Instead of letting the fruit and shell rot in the farm, we use them in delicious and nutritious products that increase the value of the cacao fruit crop.”
So, why haven’t other chocolate makers adopted a similar process given all of its upsides?
“The industry was built to make chocolate, not to celebrate cacao,” Brenner said.
“Blue Stripes is rewriting that story – turning waste into wellness and creating products that nourish both people and the planet.”
Brenner said the brand has created $1.5 million in additional revenue for Ecuadorian farmers without growing any additional cacao since it partnered with Whole Foods Market.
“If supply chain partners upcycled 70% of the value lost, we would create $25 billion in new profits for cacao farmers, tripling the industry’s value.”
The Food Institute Podcast
How does one ride the skate ramp in CPG? Dr. James Richardson, author of Ramping Your Brand and owner of Premium Growth Solutions, shares some of the pitfalls many early-stage CPG brands make, and highlights some of the pathways to success.
