Chocolate manufacturers face growing pressure to tempt shoppers back with promotions, even as cocoa’s retreat from its peaks offers consumers little prospect of a rapid return to earlier prices.
Speaking on Bloomberg This Weekend in an interview published on 25 October, Bloomberg Intelligence analyst Ignacio Canals Polo said disease and stressed trees in Côte d'Ivoire and Ghana remained structural constraints on cocoa supply.
Although cocoa was cheaper than a year earlier, he said it remained expensive against historical averages. He expected more promotional activity as manufacturers sought to rebuild sales volumes, rather than a substantial reversal of chocolate price increases.
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Why Lower Costs Take Time To Reach Shelves
Company disclosures show why falling commodity prices don't immediately reduce manufacturers’ costs.
Mondelēz said in its first-half 2026 filing that lower cocoa prices had not reduced costs because existing hedges reflected previously contracted prices. Its commodity purchasing programme and the timing of inventory consumption delayed the impact of market movements. Packaging, energy, nuts and other ingredients also contributed to higher costs.
The adjustment is uneven. Hershey reported that lower net commodity costs, higher selling prices, and productivity savings lifted its second-quarter adjusted operating margin to 20.2%, up from 15.7% a year earlier.
However, its North America confectionery business recorded approximately 14 percentage points of price realisation alongside a roughly 10-point volume decline. Hershey attributed the volume movement to price sensitivity and shipment timing, partly offset by retailer inventory replenishment.
Halloween Tests Shoppers’ Tolerance
Early seasonal trading points to continued pressure on demand.
Consumer Edge’s Basketview data showed chocolate sales by value falling 2.3% year on year in October through 15 October. Volumes declined 7.1%, while average prices per unit increased 5.2%. Non-chocolate confectionery also weakened, suggesting affordability pressures extend beyond products directly exposed to cocoa costs. These figures cover early October, not the full Halloween season.
Consumers still intend to spend heavily on the holiday. The National Retail Federation’s survey of 7,889 US consumers projected total Halloween expenditure of $13.5 billion. That includes costumes and decorations, however, and does not establish growth in chocolate consumption.
White House Halloween
The industry is also taking part in Halloween celebrations at the White House. Like many streets in the United States, Pennsylvania Avenue will be a hive of activity, especially at the White House, where the National Confectioners Association said it was partnering with the current residents to bring trick-or-treating to the South Lawn. The event is scheduled for 29 October, and the association will provide sweet treats.
Still, Canals Polo also described reformulation as a response to volatile cocoa costs. Examples included using more almonds or combining cocoa powder with vegetable oils instead of cocoa butter. He said such changes could alter flavour, making aggressive reformulation risky for brands whose customers recognise familiar recipes.
CocoaRadar View
Lower cocoa prices create potential room for promotions as expensive purchasing commitments unwind. Whether manufacturers use that room to rebuild volumes will depend on their costs, margins and customers’ willingness to buy.
Persistent supply problems could restrict that flexibility. Sustained commodity relief could widen it. Final Halloween volumes, promotional activity, and subsequent company cost disclosures will show whether affordability is improving, and whether shoppers respond by buying more chocolate.