The year 2025 is poised to bring significant pressure on chocolate companies worldwide, with the global cocoa shortage persisting since early 2024. As nearly 70% of the global cocoa supply is produced in West Africa, which is commonly known for its rising temperatures, unpredictable rainfall, and prolonged droughts, the international disaster that is threatening the chocolate industry should not be ignored. However, this phenomenon is not as decipherable as a single-edged sword and implies more than climate disasters.
If you’re interested in finding out more information as to why the system is facing an unprecedented set of challenges, you’ve come to the right place. As for chocolate lovers who felt the price pinch this Valentine’s Day, you should know that the future of your beloved candy doesn’t seem promising next to the looming threat of a global trade war. Buckle up!
Climate Change Is The Biggest Enemy Of The Cocoa Industry
Unfortunately for everyone with a sweet tooth, in addition to all regions that have long been rendered as completely unsuitable for growing cocoa due to climate change, cocoa-growing countries in West Africa will experience a harmful increase of 3.8°F (2.1°C) in temperature by 2050. Climate change, deforestation, and global warming are no longer “maybe” or “potential negative events.” They’re a reality that has confined the cocoa industry into a destructive loop, driving farmers to desperate gestures such as cutting down forests to create more growing areas, an action that ultimately creates additional climate change.
In such wretched times, it is quite a challenge to maintain your position as an eco-friendly cocoa company. In the face of climate change, when many regrettably succumb to unethical practices, you must not forget to care for the planet, too. At the end of the day, implementing robust policies and innovative technology seems the ultimate option for fighting climate change as a reputable cocoa manufacturer.
Europe And Deforestation Regulations
The European Union’s new regulation about deforestation will come into force starting on 30 December 2025, aiming to place only relevant products on the EU market, forcing companies to prepare for the new obligations through thorough due diligence. The Deforestation Regulation targets companies trading in cocoa, coffee, soya, cattle, and several others, refusing to trade any goods that are grown, causing deforestation, forest degradation, or any violation that periclitated local environmental and social laws. Furthermore, the new rules have gone as far as requiring GPS-tracked proof that every bean has grown under sustainable circumstances, creating a logistical nightmare for numerous small-scale farmers. Just the thought of tracing a single bulk shipment has come as a devastating headache for the multitude of companies that lack the technology or funds to keep up with this regulation, stressing over being excluded from one of the largest chocolate markets worldwide. Considering the system is already strained, and this regulation has the potential to take even more products out of the market, this would create pressing supply chain issues, leading to further dramatic price increases.
Trump’s Tariffs And Global Uncertainty
It’s funny how, one second, you might think that there is no possible way for things to become worse than they already are, and the next, you have to face a more complex dilemma. This principle applies to the chocolate industry, too, as U.S. tariffs have entered the chat as a disastrous storm that has caused even further turmoil. The Trump administration has recently announced tariffs of 21% for the Ivory Coast and of 10% for Ghana when importing into the USA, threatening to strike extra costs into prices that are already inflated. As a response, Agriculture Minister Kobenan Kouassi Adjoumani expressed his wish for Washington to reconsider the decision, threatening to increase the cost of cocoa and cause a more unfortunate situation for consumers. This statement, however, lacks substance and power, as Ivory Coast does not have the right to decide cocoa’s price, with the global market being in charge of this decision.
Even if it weren’t for Trump’s tariffs and crop yields would finally rebound to favorable levels, there would be no favorable cocoa price news until 2026. Current prices are an unfortunate reality that we all have to endure, as Theobroma cacao trees require around five years to reach maturity. Consequently, the actual shortages will remain interwoven with global supply networks well into the future.
How Is The Chocolate Industry Embracing The News?
To adopt a strategic attitude towards rising input costs, chocolate companies are embracing shrinkflation – which could be commonly interpreted as the “walk of shame” in modern times- reducing the product size while keeping prices unchanged. Here are a few examples:
- Cadbury has cut Dairy Milk into two bars for the same price. Packs that previously weighed 244.8g are now 190.4g, and each bar costs an extra 10p.
- The Mondelez Group from Milka has decided to reduce the weight of the chocolate bar to 90 grams, increasing their prices by 33%.
- Toblerone widened the gap between its signature triangles.
- Hershey’s Chipits a size reduction of 10%.
As you can imagine, this is just a part of what is yet to come. Shoppers have not embraced this change with a smile on their faces, making furious statements on X, such as “chocolate should stay forever on the shelf from now on.” It’s no wonder that shrinkflation is leading shoppers to nurture deep feelings of frustration, as they’re practically politely robbed by brands they have trusted and shopped from forever. There is also a lot of “reluctant acceptance” among chocolate lovers, but if this trend continues, it could further cause a fallout for numerous chocolate brands. Consumers are already switching to alternatives, as no matter how loyal you are to a brand, financial issues will always concern the heart.
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