Falling cocoa prices offer sweet relief for chocolate stocks ahead of Halloween

Cocoa (CC=F) prices have fallen 51% this year after years of surging input costs, offering relief to the global chocolate industry and just in time for Halloween.

According to new analysis from the trading and investing platform eToro, the dip in cocoa prices has helped lift the performance of key confectionery stocks, with a "confectionery basket" consisting of Lindt (LISN.SW), Hershey (HSY), Mondelez (MDLZ), and Nestlé (NESN.SW) climbing 14% year-to-date, its strongest performance since 2021.

However, a closer look at the data reveals a more nuanced picture. Over the past year, confectionery stocks are up only 2%, reflecting the lingering effects of last year’s record-high cocoa (CC=F) prices.

Over a three-year period, performance remains broadly flat at +2%, but the five-year data shows an 18% gain, suggesting that chocolate makers have managed to effectively defend margins through one of the most volatile commodity cycles in recent memory.

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For instance, in the UK, data from consumer group Which? shows that chocolate prices jumped 14.6% from January to August 2025, highlighting the ongoing pressure on prices despite recent relief on the cocoa (CC=F) front.

Cocoa’s (CC=F) price volatility has been driven by a series of supply-side issues, including harvest failures and export bottlenecks in West Africa, which have led to a 153% surge in the commodity's price since 2020.

Yet, despite these challenges, chocolate equities have largely managed to maintain their ground, a testament to both the resilience of the sector and consumers' willingness to continue purchasing, even as prices climbed sharply.

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“Chocolate makers are finally getting some breathing space as cocoa (CC=F) prices fall,” said Sam North, market analyst at eToro.

“Even after years of extreme cost pressure, the sector held up far better than expected. The data show that people may cut back on big luxuries, but they rarely give up small ones – and that’s helped keep chocolate stocks remarkably stable.”

Among the key players in the sector, Lindt (LISP.SW) has emerged as a standout. The Swiss chocolatier has seen its stock rise by 30% year-to-date, 22% over the past year, 35% over three years, and 57% over five years.

In comparison, Hershey (HSY) has gained 10% so far in 2025, with more modest 1-year growth of 0% and a 27% increase over the past five years.

Mondelez (MDLZ) and Nestlé (NESN.SW) have experienced more turbulent results, with Mondelez up 5% year-to-date and a 10% increase over five years, while Nestlé has climbed 12% year-to-date but is down 22% over the past five years.

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“This is an industry that’s proved remarkably resilient,” North added. “Even when cocoa (CC=F) prices doubled, shoppers kept buying, they just adapted. Now the question is whether that resilience holds if sales volumes stay soft through Halloween and into the holidays.”

Read more: UK shop prices cool as retailers roll out early Halloween discounts

Despite the significant price increases in recent years, consumer demand for chocolate remains relatively robust, with many opting for smaller indulgences rather than cutting back entirely. This “small luxury” behavior has been a key factor in the sector's ability to weather the storm, even amid rising raw material costs.

However, the coming months will be crucial in determining whether this trend can sustain itself through the typically high-demand holiday period.

Separate data from the British Retail Consortium (BRC) and NIQ showed that shop price inflation slowed in October as retailers rolled out early discounts ahead of Halloween.

“Overall shop price inflation slowed in October, driven by fierce competition among retailers and widespread discounting,” said Helen Dickinson, chief executive of the BRC.

“While food inflation remains high, especially for fresh food where prices continued to rise, it eased for ambient goods. Easing global sugar prices helped to bring down prices of chocolate and confectionary, a treat for those preparing Halloween parties.”Lindt has seen its stock rise by 30% year-to-date and 57% over five years.·REUTERS / Reuters

Candy lovers in the US are bracing for another price hike this year, with prices for sweets expected to rise by an estimated 10.8%, according to an analysis from think tanks The Century Foundation and The Groundwork Collaborative. Some of the most popular chocolate-based treats could see price increases of at least 20%, a big jump for consumers already grappling with inflation.

The price surge comes as a direct result of tariffs imposed by president Donald Trump on key cocoa (CC=F) exporters. The move targets imports from the Ivory Coast, the world’s largest cocoa producer, with a hefty 21% tariff. Ecuador, the second-largest producer, also faces a 15% tariff on its cocoa exports to the US.

For Hershey (HSY), the largest chocolate manufacturer in the US, the economic impact is already being felt. The company has warned that the tariffs could cost it more than $100m this year alone. In a statement earlier this spring, Hershey’s acknowledged that the combination of rising cocoa (CC=F) prices and the added tariff burdens would force the company to raise its prices.

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