The CEO of Cadbury maker Mondelēz International is confident that consumers’ sweet tooths will keep them buying chocolate even if stubbornly high cocoa prices further increase how much they pay for the popular confection.
Chocolate makers have significantly raised prices as they contend with supply shortages from years of disease and poor weather. Mondelēz, the No. 2 player in the $134 billion global chocolate segment, increased chocolate prices last year by roughly 10% and expects consumers could eventually see prices up to 50% higher than normal.
Nonetheless, CEO Dirk Van De Put tells Food Dive that he believes that consumers’ love of chocolate and the strength of the company’s portfolio – which includes brands like Toblerone and Milka – will help the company navigate the period of volatility.
“We still believe very strongly in chocolate,” Van de Put said at the Consumer Analyst Group of New York’s annual gathering in Florida.
Chocolate makes up approximately a third of Mondelēz’s business and, so far, higher prices haven’t impacted sales. The snacking giant estimated that revenue in its chocolate business — led by Milka and Cadbury — hit $11.2 billion in 2024, with volumes dipping only slightly.
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With elevated cocoa costs, the snacking giant is planning additional price increases in 2025.
It’s also taking other steps to offset higher expenses. In places such as Europe and India, the company has launched additional pack sizes for key brands including Milka and Cadbury to give consumers more choices depending on their budgets. It’s also stepping up store activations and pushing harder on seasonal items to spur shopper interest.
Hershey, which expects cocoa prices to have a significant impact on earnings, has explored chocolate alternatives to help offset costs.
The Pennsylvania company also has increased marketing and boosted innovation by 40% in chocolate compared to 2023. Michele Buck, Hershey’s CEO, said at CAGNY that the Reese’s and Kisses maker is positioned to “emerge as a stronger, more efficient and more agile company.”
While Mondelēz’s portfolio of well-known chocolate brands is key to giving it an advantage over its competitors, there are other strengths for the snacking company. It purchases large amounts of cocoa for a lower price over a longer period than its smaller competitors who often are buying month to month, putting pressure on their balance sheets.
The snacking giant also benefits from its wider breadth of package sizes. In addition, it has a strong presence in chocolate tablets and blocks, the most popular formats in countries outside the United States, where consumers often are willing to pay slightly more for the richest, most intimate chocolate taste and mouthfeel experience.
Van de Put said Mondelēz will emerge from the ongoing cocoa volatility “stronger as a company,” Van de Put said.
However, cocoa prices are unlikely to get back to levels reached four years ago. His advice to shoppers: get used to paying more for the popular sweet.
“Consumers will need to get used to a chocolate that is 30%, 40%, 50% more expensive than it used to be,” he told analysts.
Erin Lash, a director of consumer equity research at Morningstar, said chocolate’s position as an affordable indulgence, intense brand loyalty and minimal private label exposure should allow it to emerge from recent turmoil.
“The category has been able to digest [previous price hikes] and keep consumers coming back,” she said in an interview. “I haven’t seen anything to suggest that that’s going to change.”
