Despite soaring cocoa costs and multiple price hikes, Mondelēz International remains optimistic that consumer demand for chocolate will hold steady. The company, which owns major brands like Cadbury, Toblerone, and Milka, has already raised prices by about 10% and warns that increases of up to 50% could be on the horizon.
The global chocolate industry, valued at $134 billion, has been hit by supply shortages driven by disease and poor weather conditions affecting cocoa crops. However, Mondelēz CEO Dirk Van de Put believes the company’s strong portfolio and consumer loyalty to chocolate will help it weather the volatility. Speaking at the Consumer Analyst Group of New York’s annual conference, he reaffirmed confidence in the category, stating that chocolate remains a resilient part of Mondelēz’s business.
Chocolate accounts for roughly a third of the company’s revenue, with 2024 sales reaching $11.2 billion. Despite higher prices, sales volumes have only slightly declined, signaling that consumers are still indulging in their favorite treats.
To manage rising costs, Mondelēz is planning additional price increases in 2025 and introducing new pack sizes in key markets like Europe and India. The company is also investing in store promotions and seasonal products to keep consumers engaged.
Competitor Hershey is also feeling the pressure of escalating cocoa prices. In response, the Pennsylvania-based company is ramping up marketing, increasing product innovation by 40% compared to 2023, and even exploring chocolate alternatives to offset costs. Hershey CEO Michele Buck remains optimistic, stating that the company is positioning itself to emerge stronger and more efficient.
As cocoa prices continue to rise, chocolate makers are betting that consumers’ love for their favorite sweets will outweigh the impact on their wallets.