Cocoa prices have plummeted nearly 70% since Valentine’s Day 2024, yet consumers are not seeing corresponding relief at the checkout counter. Heart-shaped boxes of chocolate, Easter bunnies, and everyday chocolate bars are all more expensive this year, despite the significant drop in the cost of the key ingredient.
U.S. Retail chocolate prices rose 14% between January 1st and the first week of February 2026, compared to the same period last year, according to market research company Datasembly. This follows a 7.8% increase during the same timeframe in 2025, indicating a sustained upward trend in prices even as cocoa costs decline.
The situation is even more pronounced in Europe. Germany, for example, experienced an 18.9% increase in chocolate prices in 2025, according to government figures.
Cocoa’s Volatile Journey: From Surge to Slump
The price surge began in 2024, driven by insufficient rainfall and crop diseases in West Africa, which supplies over 70% of the world’s cocoa. Cocoa futures reached record highs as a result. However, improved weather conditions in Ivory Coast and Ghana, coupled with increased production in Ecuador and other regions, have led to a significant rebound in supply, according to an analysis by J.P. Morgan.
Interestingly, declining cocoa prices are also linked to a decrease in global demand. As chocolate became more expensive, consumers began to purchase less, prompting manufacturers to reduce the amount of chocolate used in products or shift towards alternatives like gummy candies to manage costs, explained Chris Costagli, a food thought leader at NIQ.
NIQ data shows that annual retail sales of chocolate in the U.S. Rose 6.7% in 2025, but this increase was largely attributable to higher prices. The number of individual chocolate products sold actually decreased by 1.3%, demonstrating that consumers are buying less chocolate overall.
The Impact of Tariffs
The Trump administration’s tariffs, implemented last February, also contributed to the price increases experienced by U.S. Consumers. A tariff averaging 15% on cocoa-producing countries raised the cost of U.S. Cocoa imports, as noted by the U.S. Federal Reserve.
The tariffs on cocoa were removed in November, along with other commodities not grown domestically, including coffee, spices, and tropical fruit. However, tariffs of 15% or more on products from the European Union, including chocolates, remain in effect.
Why Prices Aren’t Falling – Yet
The lag between falling cocoa prices and lower retail prices is a common phenomenon, analogous to the situation with gasoline prices. Even when the cost of crude oil decreases, it takes time for those savings to be reflected at the pump, as companies work through existing inventory purchased at higher prices.
Chocolate manufacturers, like The Hershey Co., often operate under long-term contracts that lock in cocoa prices above current market rates. The inherent volatility of the cocoa market creates a degree of caution. Companies are wary of reducing prices only to face another surge in cocoa costs due to unfavorable weather or increased demand.
However, companies are also closely monitoring consumer behavior. As Costagli pointed out, “If the customer is still willing to pay that higher price point, do we really take the price down?”
Mondelez International, the parent company of brands like Oreo, Cadbury, and Toblerone, raised prices by 8% globally in 2025 to offset higher cocoa costs. In Europe, price increases were even steeper, leading to a significant decline in sales volume. Mondelez has lowered prices in some European markets, including the United Kingdom and Germany, this year.
Dirk Van de Put, Chairman and CEO of Mondelez, stated during a February conference call with investors, “We have learned that certain price points are very important, and so we have adjusted already to put our products at the right price point.” He indicated that immediate price cuts were not planned for North America, where both price increases and sales volume losses were more moderate.
Trading Up and Down the Chocolate Aisle
Interestingly, two segments of the U.S. Chocolate market experienced growth in 2025: value brands and super-premium brands.
The increased interest in higher-end chocolates, such as Ferrero Rocher, Justin’s, and Lindt Excellence, may seem counterintuitive given consumer reluctance to pay more for mainstream brands. However, these premium lines were less aggressive in implementing cocoa-related price increases, as their products already commanded higher price points. As Hershey and Mars raised prices, some consumers opted to trade up to these more luxurious options.
“It’s given the aspirational shopper that little push they need to trade up. If they wanted a better product, if they wanted better experience, better product characteristics, organic, fair trade, whatever it might be,” Costagli said.
Conversely, value brands, like Whitman’s and certain store brands, also saw increased sales as price-conscious shoppers traded down from mainstream options. The savings achieved by switching to value brands are now greater than in the past, making the trade-down option more appealing.
“The savings you get by trading down is actually greater than it used to be,” Costagli concluded. “So from an aspirational perspective, it’s easier to trade up, and from a financially insecure perspective, it saves you more to trade down.”
