Melting point: High chocolate prices the new normal

Australians will continue to pay high prices for smaller and less-concentrated chocolate snacks despite some near-term relief, according to a new report.

Chocolate lovers around the world can expect lower prices ahead as cocoa futures ease from historic highs, but blocks, bars and bites likely remain above pre-”cocoa-crisis” levels, Rabobank research found.

Since 2021, poor harvests, crop disease and structural supply issues have lit a match under global chocolate costs, prompting manufacturers to employ “shrinkflation” or “skimpflation” tactics to manage margins, RaboReserach agriculture analyst Paul Joules said.

“Shrinkflation involves reducing pack sizes, while skimpflation changes recipes to lower cocoa content, often replacing cocoa butter with cheaper fats or fillers,” he said.

In some cases in European markets, altered products were required to change their product descriptions after failing to meet the legal definition of chocolate.

“The chocolate market is entering a new era of higher costs and persistent volatility, requiring agility and continuous adaptation from industry players,” Mr Joules said.

While the worst of the “cocoa shock” appeared to be over, with cocoa futures expected to fall significantly by mid-2027, ongoing issues like ageing cocoa trees, crop disease and climate impacts would ultimately provide a floor for chocolate prices.

“While the peak of chocolate retail price inflation may be behind us, the pressure remains, and the industry is hedging its bets for a resilient future,” Mr Joules said.

Major industry players were investing in novel cultivation and production techniques, including lab-grown beans and precision fermentation using micro-organisms to produce proteins, fats and enzymes.

German start-up Planet A Foods uses chromatography, mass spectrometry, and genetic engineering to make “chocolate” from sunflower-seeds and grape-seed flour without using cocoa at all.

“Technologies such as lab-grown cocoa and precision fermentation are part of this strategic shift,” Mr Joules said.