Chocolates are a favorite romantic gift for Valentine’s Day—everything from a rich chocolate truffle to chocolate-covered strawberries. Beyond the happy smiles of chocolate enjoyers everywhere this Valentine’s Day, there are changes lurking in the industry. The future of chocolate is murkier than ever before.
If you have ever seen a chocolate plant, you will find the fruit quite different from the smooth, creamy chocolate in your favorite confectionary. The cocoa fruit pod is the size of a melon, and it’s grown in hot, rainy, tropical areas around the equator. Each melon-sized pod yields around 30 to 40 cocoa beans, which are dried and fermented before the next steps in the production process.
The dried beans are further roasted, and shelled into pieces before being ground into a paste, commonly referred to as chocolate liquor. The chocolate liquor is often processed to separate out the cocoa power from the cocoa butter (commonly referred to as grinding in the industry). Traditionally, chocolate is often made by adding more cocoa butter and sugar into the chocolate liquor.
It takes about 10 of the pods to yield enough dried beans to make one pound of chocolate. At a recent peak in 2022, the world produced just under six million tons of these dried cocoa beans in 2022, mostly in Africa.
Recently, the supply of this delicious treat has been under threat. The cocoa commodity index has jumped 500% since 2022, after decades where the prices have been stable. The total cocoa supply in 2024 has fallen to around 4.4 billion tons (25% reduction since 2022), and the lowest in 45 years.
The increase in cocoa prices has impacted consumers with price increases, and it has reduced product sizes. Some manufacturers have resorted to substitutions, and some companies are offering non-chocolate products, or completely removing cocoa from their products. One potential alternative that some producers are working with is carob, from the tree of the same name grown in the Mediterranean region.
For craft chocolate makers targeting high-end chocolate enjoyers for key holidays like Valentine’s Day, they do not have that luxury. Some craft makers have increased their prices by 10% to 20% in the past few months—all due to the shortage in cocoa production.
How did the grinch steal our beloved chocolate? There are several long-term factors impacting the shortage.
Cocoa trees become increasingly prone to disease as they age. So old farms are abandoned, with new ones established in fresh forest. But this is becoming increasingly difficult due to a lack of new land to farm, and competition with mining interests in the growing area. Farmland is often sold to miners, exacerbating the production challenges.
Recent weather patterns in western Africa, often associated with the recent El Nino cycle, have been reducing production from the cocoa tree farms. The same weather phenomenon that has suppressed hurricanes in the past couple years has caused drier weather in West Africa, contributing to increased plant disease that devastated the trees in that region. The weather impacts not just total production, but also the quality of the beans produced, further stressing the craft makers who rely on top-grade beans.
Meanwhile, chocolate demand is continuing to grow at around 4% annually. So the mismatch between supply and demand is likely to be further strained. Because most manufacturers tend to hedge their long-term supply agreement pricing, according to a senior analyst at RaboResearch, the recent steepest price increases are likely to trickle to consumers in 2025.
Long term, farms worldwide may grow more cocoa trees as a result of this steep increase in price, but it will take three to four years to begin producing beans. And across many of the traditional growing regions, new farms in West Africa and South America will still face the same challenge of disease and weather patterns that has weakened production.
Carob, the alternative you can already buy, has been thriving since the 1970s as a natural sweetener and thickening agent. It is low in fat, and rich in fiber, calcium, and antioxidants, a potentially healthier alternative. But it has a distinct flavor and texture, and a more nutty and sweeter taste profile for consumers to adapt to.
Other startups have been looking at newer alternatives in trying to create a more perfect substitute for the diminishing chocolate supply aimed at a taste-conscious chocolate lover. One promising process uses fava beans. Most of the plants being looked at as alternatives have less demanding agriculture needs than the cocoa tree, mitigating the ecology impact to the chocolate supply chain.
Even further out, some other companies are looking at options of growing cocoa plant cells in a bioreactor, to produce chocolate without relying on the trees. The development is in early stages, but it uses the same technology advancements in the pharmaceutical industry for cancer drugs and nutrient supplements.
As the price of chocolate stays at all-time highs, these alternatives will likely gain more traction in the industry, especially for the price-sensitive segment of the chocolate industry. Short term as the supply drops, and the price increases, the industry is already seeing consumers pulling back on satisfying their sweet tooth. Data from a Jan. 16, 2025, report show North American chocolate grinding falling 1.2% in 2024 year-over-year, following similar trends in Europe, where its grindings dropped 5.3% in quarter 4, and fallen for two years in a row.
So expect 2025 to be a year in which you’ll likely see both a shortage of high-quality chocolate as well as increased prices. And on the horizon, if the chocolate alternative startups gain traction, we may see more and more chocolate using less and less cocoa, and the use of more alternatives to cocoa. It will be hard to conceive a world without chocolate, but we may be entering a period where consumers will be seeing hybrid offerings of both original and newer alternative chocolate.