Global confectionery major Mondelēz International is reshaping its chocolate innovation strategy by reducing cocoa content in some new products and expanding premium offerings, as high cocoa prices continue to impact profitability despite recent declines in commodity rates.
The maker of brands such as Toblerone, Milka and Cadbury said that although cocoa prices have fallen from record highs seen in late 2024, the company is still facing cost pressure because of long-term supply contracts and hedging arrangements.
Large chocolate manufacturers typically purchase cocoa nearly a year in advance, meaning the benefit of lower prices may not be fully reflected in finished products until 2027, provided there are no further disruptions in the global cocoa market.
Dirk Van de Put, CEO of Mondelēz, said the company is rethinking product innovation to manage costs, especially in Europe and emerging markets, which together account for about 95% of its chocolate sales.
As part of the strategy, the company is introducing more chocolate bars with fillings such as caramel, nougat, nuts and fruit, which require less cocoa compared to solid chocolate tablets. At the same time, Mondelēz is expanding its premium chocolate range, where consumers are more willing to pay higher prices for indulgent and innovative products.
The company noted that premium chocolate typically generates nearly twice the revenue compared to mainstream products, making it a key focus area. Collaborations with the popular biscuit brand Biscoff, including co-branded variants under Cadbury, Milka and Côte d’Or, are part of its premiumisation push.
Mondelēz is also increasing its focus on smaller formats such as bite-sized treats and is looking to strengthen its presence in discount retail channels, where it currently has limited market share.
Van de Put said the company expects some relief as cocoa prices soften and plans to reinvest part of the margin improvement into advertising and in-store promotions during 2026 to support its chocolate portfolio.
Other global chocolate makers are adopting similar strategies. U.S. confectionery giant The Hershey Company has also introduced products with added fillings and wafers to reduce cocoa usage while maintaining product variety, highlighting how sustained volatility in cocoa prices is forcing the industry to rethink product formulation and pricing strategies worldwide.