The High Price of Chocolate

Decadent cakes, gooey candy bars, and fudgy brownies are a far cry from where chocolate begins. Cocoa comes from cacao (kuh-KOW) trees. Those trees thrive only in hot tropical climates close to the equator—including in parts of Africa, Asia, Central America, and South America. 

Cacao trees are highly sensitive to changes in temperature and rainfall. Even in the best conditions, they can take three or more years to produce their first harvest.

Extreme weather due to climate change makes cocoa farming even harder. In 2023, West Africa received record amounts of rainfall. The cocoa-producing areas in Côte d’Ivoire had their highest total precipitation in more than 20 years, according to the former data firm Gro Intelligence. That excess rain hurt the cocoa harvest. 

This year, the farmers have had the opposite problem. Droughts in West Africa are the second-worst in more than 10 years. In addition, plant diseases are killing cacao trees. 

As a result, cocoa production has decreased over the past three harvesting seasons—by 467,000 metric tons in Côte d’Ivoire and by 448,000 metric tons in Ghana. (One metric ton is about 2,200 pounds.)

Decadent cakes, gooey candy bars, and fudgy brownies are a far cry from where chocolate begins. Cocoa comes from cacao (kuh-KOW) trees. Those trees grow well only in hot tropical climates close to the equator. That includes parts of Africa, Asia, Central America, and South America.

Cacao trees are very sensitive to changes in temperature and rainfall. Even in the best conditions, they can take three or more years to produce their first harvest.

Extreme weather due to climate change makes cocoa farming even harder. In 2023, West Africa received record amounts of rainfall. The cocoa-producing areas in Côte d’Ivoire had their highest total precipitation in more than 20 years. That is according to the former data firm Gro Intelligence. The excess rain hurt the cocoa harvest.

This year, the farmers have had the opposite problem. Droughts in West Africa are the second-worst in more than 10 years. In addition, plant diseases are killing cacao trees.

As a result, cocoa production has decreased over the past three harvesting seasons. It has decreased by 467,000 metric tons in Côte d’Ivoire and by 448,000 metric tons in Ghana. (One metric ton is about 2,200 pounds.)

Despite cocoa’s shrinking supply, consumers haven’t given up their love of chocolate. U.S. customers spent $25.9 billion on the sweet treat in 2023, compared with $19.2 billion spent on non-chocolate candy. 

When goods or services are in high demand but in short supply, whoever is selling them often raises prices. This is known as the law of supply and demand. U.S. retail chocolate prices have increased 10 percent in the past year and are projected to keep rising, economists say. 

“We’re at the mercy of a key ingredient that can really see a lot of variation in price . . . especially when there are problems with the environment,” says Melanie Marks. She is a chocolate economics expert in Virginia.

But what’s the most you would pay for chocolate? Companies know there’s only so much they can charge without losing customers. So they have other work-arounds. Some are shrinking package sizes. Others are pushing candies with less chocolate. The new Chocolate Frosted Donut Kit Kat, for example, is dipped in chocolate on only one side. 

Some companies are trying to boost their products’ chocolate taste with artificial flavor. Does your favorite candy’s label say “chocolate” or “chocolate flavor”? To call it “chocolate,” at least 10 percent of the candy’s weight must be cocoa, according to U.S. food regulations. 

The cocoa supply is shrinking. But consumers have not given up their love of chocolate. U.S. customers spent $25.9 billion on chocolate in 2023. In comparison, they spent $19.2 billion on non-chocolate candy.

Sometimes goods or services are in high demand but in short supply. When that happens, whoever is selling them often raises prices. This is known as the law of supply and demand. U.S. retail chocolate prices have increased 10 percent in the past year. And they are expected to keep rising, economists say.

“We’re at the mercy of a key ingredient that can really see a lot of variation in price . . . especially when there are problems with the environment,” says Melanie Marks. She is a chocolate economics expert in Virginia.

But what is the most you would pay for chocolate? Companies know there is only so much they can charge without losing customers. So they have other work-arounds. Some are shrinking package sizes. Others are pushing candies with less chocolate. For example, the new Chocolate Frosted Donut Kit Kat is dipped in chocolate on only one side.

Some companies are trying to boost their products’ chocolate taste with artificial flavor. Does your favorite candy’s label say “chocolate” or “chocolate flavor”? To call it “chocolate,” at least 10 percent of the candy’s weight must be cocoa. That is according to U.S. food regulations.

Is there anything that can be done to boost the cocoa supply? Farmers in Côte d’Ivoire and Ghana are trying to plant more cacao trees, but it’s a slow process. “Once you have trouble with your cacao fields, it’s hard to get them to bounce back,” Marks says. 

A few companies are looking into new ways to grow cocoa. One business, called California Cultured, is using plant cells to grow cocoa in large indoor tanks. The company’s aim is to one day grow cocoa indoors on a much faster timescale—in days rather than years. 

Meanwhile, Win-Win, a firm based in the United Kingdom, is one of several companies developing cocoa-free chocolate. Win-Win is using plant ingredients to mimic chocolate’s taste and texture. The products are pricier than the chocolate brands most people are used to—for now. 

That could change as people spend more time developing chocolate alternatives—especially if cocoa availability drops further, says Alma Bezares Calderón. She teaches economics at Pitzer College in California. 

“We’re going to see that substitutes are going to become cheaper,” Calderón says. “I expect that’s going to happen . . . not so long from now.”

Can anything be done to increase the cocoa supply? Farmers in Côte d’Ivoire and Ghana are trying to plant more cacao trees. But that is a slow process. “Once you have trouble with your cacao fields, it’s hard to get them to bounce back,” Marks says.

A few companies are looking into new ways to grow cocoa. One such business is called California Cultured. It is using plant cells to grow cocoa in large indoor tanks. It hopes to one day grow cocoa indoors much more quickly, in days rather than years.

Meanwhile, Win-Win is one of several companies developing cocoa-free chocolate. Win-Win is based in the United Kingdom. It is using plant ingredients to imitate chocolate’s taste and texture. For now, the products are pricier than the chocolate brands most people are used to.

That could change as people spend more time developing chocolate alternatives—especially if cocoa is even less available, says Alma Bezares Calderón. She teaches economics at Pitzer College in California.

“We’re going to see that substitutes are going to become cheaper,” Calderón says. “I expect that’s going to happen . . . not so long from now.”