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Chocolate and candy prices in the USA - and their impact on consumer spending

Special Report: Chocolate and candy hold a significant place in the US consumer market, especially during holidays and special occasions, none more so than the Halloween season but are the treats still affordable?

Image shows chocolate cakes on a plater with a halloween theme.
Chocolate and candy sales typically spike during holidays like Halloween. Photo by Dragonfly Ave / Unsplash

In 2023, US consumers spent approximately 3.6 billion US dollars on confectionery, slightly higher than in 2022 and exceeding pre-pandemic levels.

Analysts predict sales will rise for a fourth year in a row, backed by a recent report by The National Confectioners Association (NCA). The report revealed that chocolate accounted for $21.4 billion in confectionery sales (of a $48 billion confectionery category in total) and a new high over the last year, with 65% of consumers turning to chocolate as an affordable treat. 

Despite increased food costs and economic uncertainty, Americans are leaving room in their budgets to treat themselves and others to chocolate. The top occasions for chocolate gifting in the US are Valentine's Day, a birthday, and Halloween.

John Downs, president and CEO of the National Confectioners Association, said: "Chocolate serves a unique role as an affordable and accessible treat. While American families are taking steps to streamline their spending, they continue to seek out their favorite chocolate products to enhance moments of joy and comfort. Whether it's a cherished holiday tradition or a special occasion to 'treat yourself,' consumers are making allowances in their budgets for chocolate."

Influencing factors

However, in recent years, various factors, from rising raw material costs to supply chain disruptions, have affected the price of chocolate and candy products, influencing consumer behaviour. 

This cocoaradar.com report provides an overview of current chocolate and candy prices in the US, the key factors driving these changes, and their subsequent effects on consumer spending.

Current rrices of chocolate and candy in the US

Chocolate Prices: As of 2024, chocolate prices have increased significantly, with an estimated rise of around 15-20% over the past two years. According to the NCA, the average price per pound of chocolate in the US is around $14.50, depending on the brand and quality.

Candy prices: Non-chocolate candy has also experienced price hikes, with a general increase of about 10-15% in the past year. Popular candy brands have adjusted their prices in response to rising costs of sugar and labour.

The increasing prices are driven by:
Cocoa price increases: Cocoa prices rose by over 30% between 2022 and 2023 due to supply chain disruptions and poor harvests in West Africa, which produces about 70% of the world's cocoa. They are still at a historically high price, with Cocoa trading at 7075.757 USD/T on Tuesday, October 08.

Labour and supply chain costs: Higher labour costs, combined with supply chain disruptions due to geopolitical events, inflation, and fuel prices, have further pushed up the costs of production.

Sugar prices: Global sugar prices have surged due to production issues in major producing countries like Brazil and India and climate change-driven weather events such as droughts and floods.

We think chocolate’s losing a bit of share, so consumers are certainly reacting to higher prices – Ken Goldman, Lead Equity Research Analyst, J.P.Morgan

Effect on consumer spending

The price hikes in chocolate and candy have had several key effects on consumer spending behaviour, and the NCA admits that chocolate volume and unit sales have fallen in recent years.

Cocoaradar.com can reveal there are several factors behind this trend, including:
Reduced impulse purchases: Traditionally, chocolate and candy are considered impulse buys, with consumers often picking up these items at checkout counters. With higher prices, many consumers are more conscious of these purchases, leading to a reduction in spontaneous buys. Some stores report a 5-7% decline in candy sales at checkout counters.

Switch to private label and discount brands: As prices rise, consumers have increasingly turned to private label brands and discount retailers. Private-label candy sales grew by about 8% year over year, with consumers seeking to maintain their candy consumption while minimizing costs.

Impact on holiday sales: Chocolate and candy sales typically spike during holidays like Halloween, Valentine’s Day, and Easter. However, rising prices have led to reduced consumer spending during these periods. In 2023, Halloween candy sales were still robust but saw a decrease in volume by 5% as shoppers bought smaller quantities due to price increases. Some consumers also chose cheaper candies or mixed their purchases with non-candy items.

Changes in product size and packaging: Manufacturers have responded to price sensitivity by reducing package sizes rather than dramatically increasing prices, a phenomenon known as "shrinkflation." Consumers are paying the same or slightly higher prices for smaller portions, a tactic that may dampen consumption in the long term as consumers notice the shrinking sizes.

Shift toward healthier options: Some consumers are reacting to higher prices by cutting back on indulgent treats like chocolate and candy or opting for healthier alternatives. Products with lower sugar content or organic certifications have seen slight growth as these health-conscious consumers prioritize quality over quantity.

Outlook for chocolate and candy prices over the next 12 months

Sustained high prices: The outlook for chocolate and candy prices suggests that costs will unlikely decrease shortly. With continued inflationary pressures, rising demand for raw materials, and ongoing climate-related challenges, chocolate and candy prices are expected to remain high.

Potential consumer pushback: If prices continue to rise, manufacturers may need more support from consumers, particularly those in lower-income brackets who may choose to cut out non-essential items like chocolate and candy from their budgets. This could force manufacturers to innovate with new pricing strategies or reformulate products to reduce costs.

Image shows someone holding a chocolate Hershey bar
Image: Janne Simoes/Unsplash

Investment bank J.P. Morgan Research projects cocoa prices will come down slightly over the medium term, tracking around the $6,000 mark.

In a study (Will rising cocoa prices trigger a chocolate crisis?) released earlier this year, Ken Goldman, Lead Equity Research Analyst for U.S. Food Producers and Food Retailers, J.P. Morgan, said:  “We have seen some shifting away from chocolate to other products, whether that’s cookies or salty snacks. We think chocolate’s losing a bit of share, so consumers are certainly reacting to higher prices.”

The report acknowledged that chocolate brands are grappling with the impact of higher cocoa costs, and many are passing on the burden to consumers in the form of price hikes.

“In the US, Hershey has been very clear that list pricing is still one of the most important arrows in their quiver to offset inflation. Over the next year or two, they will probably pass on more cocoa inflation, and consumers will see higher prices for their chocolate as a result,” said Goldman. “I’m sure Hershey’s competitors like Mars and Lindt are going to do the same — it’s just a matter of time.”

This could, however, dampen consumer demand, the report stated. “Companies will have to be careful about how they manage the elasticity of demand for chocolate, especially as consumers might not be able to take the price hikes needed to offset the huge increase in cocoa costs. We see an impact on volume whenever prices are raised, even in other categories that are deemed inelastic,” said Celine Pannuti, Head of European Staples & Beverages at J.P. Morgan.

Some manufacturers are innovating with recipes that call for less cocoa to regain market share, therefore shifting away from chocolate. For example, chocolate containing a higher proportion of fruits and nuts, while others are reducing the size of their products. 

“We’ve seen cases of shrinkflation, so for the same price, the chocolate bar is much smaller,” Pannuti noted. “But while these are some avenues that companies are taking, consumers will ultimately have to face higher prices.

CocoaRadar Comment
Rising chocolate and candy prices have already affected consumer behaviour in the US. While the demand for chocolate and candy remains strong, higher prices are prompting shifts in spending patterns, from reduced impulse buying to increased focus on value products. Manufacturers must adapt to these trends to maintain market share and not just rely on seasonal sales to make a profit, especially as economic pressures weigh on consumers.


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