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The gorgeous chocolatier is shrugging unstable raw material costs to enjoy the high-demand boom. Some consumers say they are dealing with higher prices for mass market products and reduced cocoa content by trading with premium products.
Cocoa prices tripled last year as bad weather in major West African cultivation regions of the world reached harvest volumes and chocolate companies handed costs to customers at higher prices.
Mondels, the maker of Hershey and Oreo, warned of profits in February after reporting a decline in sales volume in 2024, but the confectionery division of Nestlé, which owns Quitocut, reported a decline in sales last year.
However, the premium end of the market has proven to be more resilient, aided by a larger margin that helps to absorb rising costs. Luxury sweets are also focusing on counter trends amid the cost of living crisis, with regular consumers looking for luxurious items despite the high prices.
“If Mars bars are much more expensive than before, people think, 'I might trade up, too,'” said Daniele Ferrero, chief executive of privately owned Venci.
Giacomo Viviano, head of Domeri, the Italian chocolatier behind the Rococo and Prestat brands, said, “Even low-quality products have very high prices, so consumers will choose the best.”
Luxury brands Neuhaus, Jeff des Bruges, Corne Port Royal and artists all brought solid sales to Belgian pro-Company du Bois Sovege last year, but Swiss Ledarak doubled the size of its business in five years.
By contrast, Barry Carrebaud, the world's largest chocolate maker supplying most of the world's large confectionery, reported a decline in sales volume in the first half of the fiscal year, denounced “unprecedented volatility” in the cocoa market.
Mondelēz CEO Dirk van De Put said this year, while the company is navigating “unprecedented cocoa cost inflation,” Hershey said in his annual report “to experience an overall decline in consumer demand for our products.” Cocoa Futures surpassed its $12,000 per tonne record in December, but then fell below $8,500.
“Premium brands that maintain quality and craftsmanship are well suited to get through these market conditions,” said Neuhaus CEO Isabel Burt.
Many mainstream chocolate makers have quietly reformulated recipes to reduce cocoa content and protect their profits from replacing them with other fats and flavorings.
MINTEC analyst Andrew Moriarty said this should put premium chocolate makers in a “more difficult position” because the product has a higher cocoa content and “needs to stick to those ratios.”
However, customers remained mostly loyal as the gorgeous chocolatiers reduced cocoa content and refused to raise prices instead.
“Even if consumers don't know, it's going to destroy the premium culture we want to celebrate. Our business case proves you can have the highest standard of chocolate and you can get the price of it.”
Venchi's Ferrero saw a further range for premium brands to benefit from the wider confectionery industry issues if Cocoa prices remain unpredictable.
“For all consumers who have decided to buy super premium chocolate more frequently, we hope there will be two consumers who will trade up from mass market chocolate to premium chocolate,” he said.
“If you were buying a Mars bar, were you actually a chocolate lover anyway?” he asked. “How much chocolate do you get from KitKat?”
Nestlé said the KitKat recipes have not changed, adding that the popularity of chocolate bars has demonstrated “the continuing appeal of wealthy brands offering delicious products.” Mars did not respond to requests for comment.
