As we complete our second year surviving the cocoa crisis that began in late 2023 it seems like there is a whole new set of challenges that must be overcome before the cocoa supply finds stability. Though prices have moderated substantially since their peaks earlier this year, such a volatile market creates both opportunity and challenges. Generally, the crisis has been good for small farms who have been able to capture a much greater value for their crop. On the other hand, the dramatic price increase caused by the dearth of supply has rocked the chocolate making businesses that depend on their cocoa beans for making the chocolate you love. 

As expected, higher prices have driven investment in farm improvement and new plantings. However, these investments are not expected to meaningfully impact the volume of production for another 2-3 years. Because of this, it is expected that we will be living with a much higher baseline price for the near term. Additionally, premiums being paid over and above the world market price to obtain specific quality physical cocoa delivery will be elevated for the foreseeable future.

For chocolate consumers, the price of cocoa is just recently being felt as inventory slowly works its way down the supply chain, and price is finally being taken by brands and manufacturers. For us, this means our average cost of cocoa went from ~$4,000/MT to $12,000/MT. By the end of Q2 in 2025 consumer specialty and natural category chocolate prices in the US had risen by 14% (SPINS July 2025 52-week YOY change for top 30 brands) on average across the category year-over-year. The cycle from initial cocoa price shock to chocolate bar price on the shelf was about 12-18 months, and in some cases even more. This delay is caused by the a number of factors, but most notably the buying and warehousing cycle, price hedging, competitive pricing concerns among manufacturers and brands, price management cycles managed by retailers and distributors, and the need to keep factory pipes full because of very high capital asset investments that demand continued utilization. The burden of these prices seems to be largely falling on manufacturers more than on consumers in the near term. Ultimately, this will trickle down to increases in consumer prices.

Adding to the woes of chocolate makers based in the United States is the introduction of reciprocal tariffs by the current presidential administration. We are paying a minimum of 10% tariff fees to the US Government on all imports of cocoa beans, and sometimes more for other ingredients like organic sugar.  This tariff cost will be directly reflected in price inflation for all imported food items, but especially those from tropical regions which grow products that cannot be farmed here in the US such as bananas, cocoa, and coffee. We have yet to see the impact of the tariffs on consumer chocolate prices due to the latencies described above, however, I expect these to be noticed in the size of additional price increases taken by manufacturers in 2026 should tariffs on cocoa and sugar remain in place. Recent statements made by the presidential administration indicate these tariffs may be coming off soon. Our challenge now is to continue investing in the relationships we have with our farmer and export operations while working to ensure a viable business model for all actors in the supply chain while maintaining production volumes.

For Taza and other specialty chocolate makers like us, all of this market disruption means that we will be paying significantly higher prices for our key ingredient, and that chocolate price inflation will continue. Eventually, prices will moderate, as more plantings and higher profit potential in the sector drive investment. In the meantime, cacao farmers can earn more for what harvest they are able to collect, a mission we have been pursuing at Taza since 2005.

I encourage checking out our Transparency Report metrics and partner reports below, and don't forget to shop for some of our delicious Taza Chocolate Direct Trade Certified Cacao products!

Yours in Transparency,