Since 2024, the global chocolate industry has been facing several mounting challenges. While the recently imposed tariffs have played a role, they’re just one of many factors disrupting the supply chain.
At the center of this crisis is West Africa, which produces around 70% of the world’s cocoa. The region has been affected by unpredictable weather fluctuations and infectious crop diseases, both of which have significantly reduced cocoa production.
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This has resulted in global shortages and price hikes, forcing even the biggest players in the chocolate industry to rethink their strategies.
The Hershey Company, one of the largest chocolate manufacturers in the world and the producer of Reese’s, Kisses, Kit Kat, and more, has been diversifying its portfolio and revenue streams by expanding into new categories and forming strategic partnerships.
To reduce its reliance on cocoa, the company has also incorporated different ingredients like peanut butter, caramel, and wafers into its products.
Still, Hershey has yet to find a permanent solution to this issue, which led to its plan to raise prices this year.
Hershey’s competitors are betting on innovation to weather the cocoa crisis.
Image source: Scott Olson/Getty Images
Hershey rivals invest in innovative technology to fight the cocoa crisis
Hershey (HSY) is not alone. Rivals like Nestlé (NSRGY) , Mars, and Mondelēz (MDLZ) are all exploring new strategies to ensure that cocoa supplies last and meet demand. However, they’ve taken a different route to navigate these challenges by investing in innovative technology.
Nestlé has developed a patented technique that uses 30% more of the cocoa fruit to produce chocolate without altering its taste. This process maximizes cocoa production and minimizes waste by collecting everything inside the cocoa pod as a wet mass, which then ferments naturally.
The mass is then ground, roasted, and dried into chocolate flakes, which can be used to make chocolate.
“With climate change increasingly affecting cocoa yields around the world, we are exploring innovative solutions that could help cocoa farmers maximize the potential of their harvests,” said Nestlé Head of Research and Development Center for Confectionery Louise Barret in the announcement.
“While this project is still at a pilot stage, we are currently exploring how to apply this innovation at a larger scale.”
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Mars has also embraced scientific innovation to stabilize its supply chain. The company recently signed a licensing agreement with Pairwise’s Falcrum platform, which uses CRISPR gene-editing tools and the SHARC enzyme to improve crop resilience, helping develop cocoa plants that are more resistant to disease and extreme weather conditions.
“At Mars, we believe CRISPR has the potential to improve crops in ways that support and strengthen global supply chains,” said Mars Plant Sciences Director Carl Jones in the announcement. “Our focus is to transparently and responsibly conduct CRISPR research in plant science that helps crops better adapt to climate challenges, disease pressures and resource constraints.”
Chocolate giants raise prices despite promising developments
Meanwhile, Mondelēz has taken an early lead in cocoa innovation by investing in Celeste Bio last year, focused on boosting natural cocoa production through advanced technology.
Despite these promising developments and heavy investments in cocoa-producing innovations, chocolate prices continue to climb.
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Mondelēz increased prices by around 10% last year and has cautioned that prices could rise by as much as 50% in 2025, while Nestlé implemented a 2.7% price hike during the first half of 2025.
However, these price hikes appear to be temporary. According to the International Cocoa Organization, forecasts for the 2025/2026 harvest are more optimistic, and demand for chocolate is expected to weaken.
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