Cocoa prices are soaring. Candy makers will need to get creative

Cocoa prices have surged this year, causing challenges for candy companies. The price increase may impact innovation in the industry. Food companies are cautious about raising prices as consumers have pushed back against previous price hikes. Cocoa prices have tripled in the past year due to concerns about supply. Candy giants like Hershey and Mondelez are currently protected by long-term contracts, but they will likely face higher cocoa costs in 2025. West Africa, the largest cocoa producer, has been affected by crop disease and lower prices for farmers. Cocoa prices are expected to remain high, posing difficulties for food companies. Many companies will have to get creative to cope with the rising costs, including reducing the quantity of chocolate in products or finding substitutes. Analysts predict another cocoa shortfall next year due to systematic issues and climate change. Some companies are exploring non-cocoa additives or alternatives to cocoa. Recipe reformulation may take around nine months, and companies have been considering changes since the beginning of the year. Diversification into other snacks is also an option for companies to combat the cocoa crisis.