From Penny Candy to Premium Treat

The Easter Chocolate You Love is Disappearing

Trouble began for the chocolate industry in 2022 when prices for raw cocoa slowly started to increase. By 2024, when those prices had nearly doubled, chocolate factories built on a goal to deliver affordable candy bars had some decisions to make. If you’re in the habit of buying the seasonally special chocolate eggs then your wallet has likely felt the effect of those decisions over the last few years.  But, this year, you might feel it in your taste buds too.

The percent of cocoa in some of the most popular Hershey's products is now less than 2%; an ingredient shift that has created a noticeable change in flavor.  To put it in perspective, in 2020 Hershey’s milk chocolate contained 11% cocoa. Consumers have been quick to notice shrinkflation tactics and price increases. Yet, despite wrestling with the cost to value ratio, demand for chocolate continues to increase.  Will the trajectory change if the flavor of beloved candy bars no longer meets expectations?

Is Chocolate Reformulation Duping Consumers?

To answer this question we have to look at how ingredients determine the difference between a chocolate bar and candy. In the United States, anything below 15% cocoa would be considered a chocolate candy and not a chocolate bar. That means that the majority of Hershey’s product list is considered candy with only the dark chocolate options meeting the 15% or higher cocoa criteria.

Chocolate flavoring can be developed in labs and chocolate factories are already making use of sunflower seeds, barley and carob to mimic the desired taste consumers expect through lab grown creations. Reformulation extends beyond chocolate flavors.  Hershey’s and other chocolate factories have added more milk, oils and nuts to recipes to offset the missing cocoa.  And you might discover that the candy coatings that look like chocolate do not contain cocoa at all.

Chocolate candy producers maintain that reformulation is a creative attempt to carry forward their overarching goal; to keep chocolate affordable. A flavor shift is worth it if the treats remain accessible to everyone. But the same changes to flavor profiles have also begun to erode trust with consumers which means that chocolate companies may have guessed wrong. In the end, consumers may want cocoa more than they want cheap products.

Cocoa Supply Increases

Interestingly, cocoa supplies have increased. Farmers in the Ivory Coast and Ghana sit on stockpiles of beans hoping for sales. Yet, most chocolate candy producers are not buying with prices so high, up 40% from just a few years ago.  Middleman companies like The Coffee and Cocoa Council and Cocobod have not been able to pay farmers guaranteed prices despite salary cuts to offset the loss of sales.  Farmers continue to abandon their fields in search of work that pays leaving the industry in further crisis.

Relief could be found in cocoa farming regions of Africa if they also took on more of the refining process.  It might equip them to better control the sale of both beans and refined cocoa for use in chocolate bars and candy. Though it would take a significant investment in infrastructure development, it could provide a path for cocoa farming to become more lucrative and the global chocolate industry to stabilize. 

For now, chocolate candy producers appear to be eyeing Asian farms for future cocoa bean supplies. Whether cocoa bean farming shifts to Indonesia or Africa builds out cocoa refineries our perception of chocolate could meet an inevitable shift.  In the interim at least, chocolate may return to luxury status.

Chocolat’s Luxury Status

Should chocolate be a luxury item and not a cheap candy? Hershey’s original Reece’s Peanut Butter Cups sold for just a penny and were the epitome of an affordable treat for the average consumer. Today an individual cup can retail for between $0.60 and $0.90 depending on where you buy them and how many you purchase at once. Even with the rising price of chocolate products, Hershey’s has managed to hold its purposefully low end position in the candy aisle.

Hershey’s can sell you a chocolate bar for far less than $2; a deal compared to Lindt whose chocolate bars go for close to $6 and Leonessa which retail for around $8. They achieve this low price range by being the opposite of luxury and mixing increasingly smaller amounts of cocoa into their recipes. High end brands are not looking to fill Halloween or Easter baskets and pride themselves on the amount of real cocoa used in their chocolate formulations.

If chocolate companies collectively raise prices while simultaneously retelling the chocolate story in light of the plight of cocoa farmers, perhaps consumers will be inclined to shift their perspective on chocolate to a once in a while luxury rather than a regular afternoon pick me up.  If Hershey’s sets their eye on quality rather than cost then explaining price increases will have to be part of the equation.  

But Hershey’s, being built on affordability, hasn’t shown signs of prioritizing quality cocoa. If the flavors go downhill consumers might favor fruit flavored jelly beans over chocolate eggs this Easter.