31 July, 2025 – Cocoa is facing challenges from all angles right now. The in-demand ingredient is widely used across food and beverage categories, and with these barriers, the demand is putting pressure on supply sources that have volatile risks associated with them. From Climate change to logistical supply chain disruption, these issues can have an adverse effect on coca pricing, leading companies and producers to reconsider what needs to be done to achieve sustainable sourcing and ethical supply chains.
Innova Market Insights examines the performance of cocoa in the food industry with a comprehensive analysis of how brands are responding to these issues. This includes how they can work with farmers and improve their net-zero commitments to achieve sustainable goals.
Cocoa’s Versatility Fuels Category Growth
Cocoa trends show that the growth of cocoa continues steadily, with confectionery being its strongest influential category. While finding a reinforced role in classic categories, cocoa has gained prominence among desserts, ice cream, dairy, and spreadable foods also. Consumers have become aware of increased pressure on cocoa, most notably finding the difference hitting their pockets with price increases due to inflation. This, of course, is no surprise given the rise in food and beverage prices over the last twelve months. The answer therefore lies in strategy, and how companies pursue these solutions will be key to mitigating further price increases.
Are Consumers Willing to Pay More for Cocoa Confectionery?
Some big players in the confectionery category are coming to terms with the challenges in front of them. As the market value of cocoa continues to rise due to issues caused by climate change, product producers know their bottom line will also be affected by economic shifts. Strategies that are being rolled out to alleviate this include price adjustments and product diversification to circumvent these challenges. Innova Market Insights has found that cocoa prices have more than doubled since the end of 2023, likely inflated by higher consumer demand and weather-related issues.
To exemplify how a major brand involved in cocoa products might face adverse market challenges. One such company had a decrease in net revenue towards the end of last year and its gross profit margin was also down, which was primarily due to both higher cocoa and transportation costs.
Tackling Cocoa Instability
With this level of instability in the cocoa category, there are pioneers in trying to tackle the problems facing the market. In Venezuela, there has been an advancement in sustainable cocoa production through a national research center, farmer training, and disease prevention measures to boost resilience and traceability. Venezuela uses this to position itself as an emerging origin in the global sustainable cocoa supply chain,
Designed as a comprehensive initiative to strengthen its cocoa sector through research, sustainability, and global trade. The center has been founded to improve crop quality and productivity through organic cultivation, bio-inputs, and nanotechnology, positioning Venezuela to future-proof its cocoa production. Cocoa farmers have been trained under the National Cocoa Plan, equipping them with scientific and sustainable practices to boost yields and resilience against climate and other challenges. This signifies a strong national commitment from Venezuela to become a competitive and reliable player in the global cocoa supply chain.
Can Cocoa Keep Up With Increasing Prices?
Alternatives have been found for brands looking to find cost-effective ways to reduce costs in cocoa production. One of which involves reducing the amount of coca by blending it with carob, roasted or chicory. Ingredients such as these possess a similar taste and texture profile, allowing cost control without compromising on the product itself. Equally, other options have been found by combining cocoa with nuts, seeds, or fruits, which also helps in maintaining indulgence without depending purely on cocoa. Another approach is to innovate with non-cocoa-centric flavors like vanilla, chai, or tropical fruits, which can shift the focus from cocoa to other tastes.
Brands have also been exploring new formats such as mini bars using plant-based or dairy-free options. These can reduce cocoa use per serving while catering to trending snacking habits. Positioning products as premium through ethical sourcing, artisanal production, or limited editions allows brands to charge more despite using less cocoa. Strong storytelling can lead consumers to a higher value proposition of a product, and recent cross-category studies have shown that shoppers will pay more for perceived quality and purpose. With this in mind, justifying higher prices for sustainably sourced cocoa is possible, therefore offsetting raw material costs and strengthening brand trust among eco-conscious consumers.
What’s Next for Cocoa?
Looking ahead, it is likely that new ways and alternatives will be developed to achieve sustainable and transparent cocoa sourcing. This will include a shift toward regenerative agriculture and blockchain traceability to ensure ethical practices. While also ensuring that the companies working in cocoa-based product production can help offset climate impact, and meet consumer demand for transparency and fair trade.
Alternatives in products that are cocoa-free will increase, as brands innovate with these products by using ingredients like carob, oats, or fermented compounds to reduce dependency on climate-sensitive cocoa crops while appealing to indulgence-seeking consumers. Speaking of alternatives, upcycling of byproducts from cocoa, such as shells and pulp, will trend with new product development in functional foods and beverages. This will help in supporting zero-waste goals while offering added nutritional and sustainability value. Elsewhere, advanced technologies like artificial intelligence and fermentation will be used to refine and enhance cocoa flavors, ensuring quality that is consistent while reducing reliance on premium beans amid supply shortages.
This article is based on Innova’s Cocoa: Current Global Challenges & Future Opportunities report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more
