Is Chocolate Still Recession Proof? | The Chocolate Professor

Is chocolate one of those things we can't live without, no matter what? The chocolate industry has long held that chocolate was “recession-proof.” It's a belief that emerged from research by the National Confectioners Association during the 2009 recession and was then widely repeated in the press. Consumers would be loyal to chocolate and tolerate higher prices for their affordable luxuries, the thinking went.

Then came the Covid-19 pandemic in 2020, supply issues, and inflationary prices. Still, chocolate manufacturers and shoppers accepted and managed increased prices and shifting product assortments. Large candy makers began shrinking pack sizes or replacing cocoa content with other ingredients, while craft chocolate makers adjusted, shifted, or removed products. By 2023, most were compelled to increase prices after years of absorbing higher costs.

In 2025, the industry may have reached a tipping point. The price of chocolate, while stable this year so far, has increased by over 200% since 2023, on top of previous increases. The cocoa bean market has experienced destabilizing volatility due to impacts from climate change on harvests, labor issues, and reduced crop yields. Later in 2025, tariffs will take effect on African and South American chocolate imports. Put this all together, and it’s a very altered and unstable market.

This situation, paired with continued high costs of doing business, is leading to major changes for large and small chocolate makers, including the shuttering of many small independent chocolatiers. Chocolate lovers across the spectrum, from single-origin-bar fans to Halloween-candy shoppers, need to be prepared for changes: higher prices, fewer choices, transformed products, and, eventually, more cocoa-free treats.

The Chocolate Market

Bringing chocolate to market is a complex and expensive affair. “Since 2020, costs associated with every aspect of our business have increased,” shares Christopher Elbow, owner of Christopher Elbow Chocolates. “Labor, packaging, cost of goods, and now tariffs affect almost every aspect of our products. There is so much more than just the high cacao prices driving our profitability.”

Profitability has indeed been the issue for every size chocolate maker. Prices of cacao shot up 61% in 2023 and another 200% by early 2025, reaching record highs and subject to continual fluctuations. In 2025, Easter candy prices were 18% higher than in 2024. Mondeléz announced a drop in adjusted earnings, while Hershey expects declines in category value. While shoppers are still buying, Mondeléz expects prices will keep rising, as high 50% above normal in the future.

The main reason for the increase in cacao prices is extreme weather caused by climate change in chocolate-growing regions around the equator. Rising temperatures, an El Niño weather system, erratic rainfall, drought, and floods have all plagued cocoa plantations and caused smaller and irregular harvests.

Cardenas Chocolate’s Susana Cardenas Credit Pauli Trujillo

In Ecuador, craft chocolate maker Susana Cárdenas, of Cárdenas Chocolate, uses premium Nacional beans and has experienced many challenges in the last three years. She describes the 2024 harvest that never materialized due to rains and severe flooding. “The trees were empty, and what little cacao they had caused the prices to go high,” she relayed in an interview. “People started looting the beans.” Now in 2025, she looks forward to an abundant harvest, yet, “prices are mental,” and she knows the trees that produce Ecuador’s historic “Golden Bean” are stressed and compromised from climate extremes.

Agricultural Challenges

Many challenges in cacao growing and harvesting ensure that price volatility will persist, guaranteeing higher chocolate prices in the future. The weather issues have weakened cacao trees and caused a rise in threatening diseases and viruses, such as swollen shoot virus. Trees infected with the virus must be uprooted and replaced, which slows down crop yields as it takes 10 years for the trees to bear fruit. New plantings of any kind will be subject to continued erratic weather, resulting in increased uncertainty.

Many plantations are aging, as are the farmers tending them. It’s a tough business with government-controlled prices and little investment in infrastructure, like irrigation or pesticides. West African farmers are cutting down trees to make room for illegal gold mines to increase their incomes. There are also ongoing labor and exploitation issues in cacao harvesting, leading some companies to restrict their bean buying to only ethically produced cacao, including brands such as Tony’s C h ocolonley and Askinosie, which may impact supply in the future.

Big and Small Chocolate Makers Adjusting

For years, chocolate makers have been making adjustments in various ways, but the changes are starting to be felt more acutely in 2025. The mega chocolate makers, including Mars, Hershey, and Mondeléz, are reducing pack sizes or producing smaller-sized items, a move positioned as giving consumers more choices. You may have noticed smaller Cadbury Creme Eggs this past Easter. These corporations are also adjusting recipes, reducing cocoa amounts, and adding more fruit, nuts, and flavorings, such as in Reese’s PB&J Peanut Butter Cups. They are increasing marketing efforts, especially for seasonal items that can be sized and priced more flexibly than year-round chocolate candy. In anticipation of tariffs, these corporations are seeking exemptions from the Trump administration, an option not open to smaller producers, like San Francisco’s Guittard Chocolate, which has mostly been absorbing the increased costs but expects it will soon need to raise prices as tariffs come into play.

For small craft chocolate makers, the situation has been much more brutal. A good number of independent, award-winning chocolate brands have closed in the first half of 2025. Austin, TX-based Madhu Chocolate was founded in 2018 and closed in April 2025. In a message posted on Instagram, the company pointed to skyrocketing prices and shortages of cacao and cocoa butter for making its business unsustainable. Jade Chocolates in San Francisco also closed, blaming the high overhead costs of its teahouse and retail shop as did Letterpress Chocolate in Los Angeles. Others have given up retail storefronts and moved to online only, such as San Francisco’s Kokak Chocolates, to be more profitable.

Craft Chocolate Survival Strategies

Craft and boutique chocolatiers continue strategizing how to manage higher costs, starting with increasing prices and removing some products from production. Askinosie Chocolate is somewhat insulated from market volatility thanks to its Direct Trade Model with specific cacao farmers, though co-owner Lawren Askinosie states that it’s still paying much higher prices and pulled some products due to high ingredient costs.

When asked about chocolate’s “recession-proof status,” Askinosie shares, “Consumers will always look for little luxuries, affordable-but-special treats that can transport them to somewhere else, even for a moment, especially during harder times.” She believes that customers seeking superior-tasting and ethically produced products with clean ingredients will pay more, especially brand loyalists.

In fact, Askinosie customers have been expecting higher prices, being tuned into industry trends. Only in autumn 2024 did the company increase its prices, its third time ever. Retailers of Askinosie bars are also supporting the challenges all chocolate players are facing, communicating the situation to customers as part of the brand’s efforts at transparency.

24-Piece Collection 2025 Christopher Elbow Chocolates

Christopher Elbow has seen a shift in customer behavior since early 2024, with shoppers opting for smaller box sizes and lower-priced items. He last raised prices in 2023 and senses that his customers won’t tolerate higher costs. “I don't think that chocolate products are ‘recession-proof’,” he states, referring to the broad range of price increases he has faced. “We have been around for over 22 years, so I remember the 2008 recession. We saw a dramatic shift in consumer behavior at that time. We are not at that point, but the potential to fall back into a situation like that seems like a very real possibility.”

Brook Johnson, owner of Yahara Chocolate & Tea in Stoughton, WI, is rethinking his buying plan for autumn 2025. He watched prices pop up during the pandemic, yet his suppliers held off on price increases. No more. One supplier stopped selling its craft bars wholesale, so Brook began to make his own bars. By 2024, customers were still “digesting the price increases, but by May 2025, 90% of the craft chocolate bars that I sell had increased in cost by $1-4 retail,” he pointed out.

He anticipates higher prices when tariffs set in and will adjust his assortment for the holidays, his biggest selling period of the year, looking for lower-cost options. In June 2025, his highest priced bars are $15, but he imagines that threshold will rise to $20 by holiday time. His customers primarily buy bars as gifts, and he feels they will pay the higher price for special, beautifully packaged bars with compelling stories. Yet he worries about the shopper with a $30 per-person gift budget. No longer can that shopper buy multiple bars. Enter smaller, lower-priced items.

Cardenas 2025 Harvest Nacional cacao Credit Leiberg Santos

Cárdenas also feels that higher costs will be accepted by her customers because they share her values as a craft chocolate maker. She has built an ecosystem of retailers and clients who appreciate and will pay for the high-quality bars she produces, many in Europe. They see her products as a “whole package”: heritage chocolate, artisan-made in small batches, and beautifully dressed. The opportunity remains for craft makers to continue to educate markets about the precious, and perhaps now somewhat endangered, products they are producing.

Summer Thompson, Senior Buyer at Market Hall Foods in Oakland, CA, feels chocolate is recession-proof. While customers are concerned about prices, she feels that they will prioritize. “Some people will buy chocolate no matter what. Some will skip the chocolate and go for the salty potato chip. Whatever makes them feel good,” she shares. Thompson doesn’t feel prices will ever come down, making chocolate more of a luxury. She sees lower-cost ingredients, like the kataifi shreds in Dubai chocolates, balancing out higher-priced nuts and cacao, and she expects more home treat-making. “Home bakers won’t stop using chocolate. People may go back to making everything at home,” only time will tell if this includes tempering and molding their own chocolates.

Looking to the Future

It’s clear that higher prices for all levels of chocolate are here to stay and may grow even higher when tariffs are applied. Chocolate products will evolve, with some featuring lower cacao contents, while others may even taste different as extreme weather conditions impact the flavor of the cacao beans. With shortages in cocoa butter, there will be fewer and more expensive white chocolate bars. These challenges to the traditional chocolate industry will drive innovation in cocoa-free chocolates made with alternative plants, including carob, or through cell cultivation and biotechnology.

Cárdenas looks to improvements in agroforestry and supports farmers adopting more sustainable practices, investing in long-term improvements, and better land management. This goes in step with more consumer education about chocolate’s unique history and heritage, and thus its increased value. Lawren Askinosie agrees: “Brands are going to need to work harder than ever to prove their value to consumers who are spoiled for choice, more savvy than ever, and rightfully demanding transparency from the things they purchase.” As happened during the pandemic, shoppers will become more conscious of supply chain issues and learn to accept a new normal while hopefully supporting the chocolate brands and products they already adore, and accepting industry evolution..