Prepping cacao pods for chocolate manufacturing. (CANVA))
At a Glance
- Cocoa prices tripled in early 2024; new tariffs could push costs up another 36%.
- Small brands pivot product strategies while maintaining sustainable farming commitments.
- Crisis affects all chocolate products with major brands reporting significant financial losses.
Chocolate manufacturers face unprecedented challenges as cocoa prices triple and new tariffs threaten to push consumer prices even higher, forcing companies to adapt strategies and potentially raise chocolate bar prices to $7-$10.
Chocolate prices barely budged for at least 20 years. Metric tons fetched anywhere between $2,500 and $3,500. But between Jan. 1, 2024, and April of that year, prices vaulted from $3,800 to $12,800 a ton.
Keith Bearden, the CEO of chocolate brand Alter Eco, recounted the dramatic spike to me this week on a video call. He still marvels over the breathtaking escalation and worries about where prices are headed. More than a year after the massive jump in 2024, they still hover around $9,000 a ton, but can rise abruptly, as much as $1,000 in one day, he says—and they show no signs of softening.
And now, Bearden confronts new forces that could further disrupt Alter Eco. The biggest one: tariffs.
Like many chocolate companies, Alter Eco Foods gets its chocolate products manufactured in Europe—in Alter Eco’s case, Switzerland. Tariffs imposed on goods imported from the European Union (EU) now sit at 15%, in the wake of a deal announced last week. Switzerland, which is not part of the EU, has had a 10% tariff.
I chatted with Bearden days before a deadline of August 1 for deals to be worked out between different countries and the Trump administration. At the time, if Swiss and American diplomats hadn’t worked out a new deal by the deadline, then Swiss imports could get slammed with 31% tariffs, which is what the Trump administration assigned to the country in April, before giving diplomats time to hammer out an agreement.
On Thursday evening*, the administration announced that tariffs on Swiss imports would be 39%—higher than anticipated and one of the highest rates in the world.
It gets worse. Alter Eco already pays 5% import duties on chocolate from Switzerland, and has been for years. So in effect, the tariff burden has risen to 44%.
“I can’t absorb that,” says Bearden. “There’s no way.”
How boutique brands are adapting
Alter Eco, which Bearden purchased in 2023, launched in 2005, has always invested in doing the right thing. From directly supporting cacao farmers to promoting regenerative agriculture, it’s commitment to the environment is baked into its mission and name.
But decades of fostering close relationships and collaboration doesn’t influence cocoa prices, which are traded as a commodity. And these things also have no bearing on tariffs.
For most of Alter Eco’s tenure on the CPG stage, it was paying in the ballpark of $30,000 for each container of chocolate products it imported from Switzerland. Now that number sits at $120,000—without the imposition of fresh tariffs.
Earlier this week, Bearden said if the Trump administration imposes the 31% tariff on Swiss goods, then within hours Alter Eco will be forced to raise prices—for the third time in about a year. Now the new tariff rate is 39%. Bars that retailed for $3.99 just last year, now sell for $5.99 and prices will rise further with new tariffs, Bearden says. Either way, each bar sold now yields less profit for Alter Eco because the company felt uncomfortable rising prices enough to cover the slimmed margin that resulted from boosted cocoa prices, never mind tariffs.
Elevated cocoa prices combined with new tariffs will mean “the general public is going to have to get used to the fact that a chocolate bar is going to cost $7 or $8, and a premium chocolate bar is going to cost $10,” Bearden says.
Beyond chocolate bars: Industry-wide impact
Alter Eco, of course, represents a minor blip on the chocolate front. Many brands are far bigger. But scale hasn’t saved the multinational conglomerates from foundering during today’s chocopolypse. Hershey announced that it’ll take a hit of about $100 million this year. Lindt raised prices by nearly 16% in the first half of 2025, and is reevaluating its U.S. supply chain.
Bearden says he knows of many boutique brands either folding or getting scooped up by larger brands in consolidation efforts. Historic European chocolate boutiques have shuttered, after generations of chocolate artisanship. Big brands are laying off employees and pausing production.
The effects ripple out far beyond chocolate bars. Ice cream. Cookies. Gas station treats like Ding Dongs and Ho Hos. Sweet products account for a significant share of food and beverage CPG sales. Data surrounding relevant categories—confectionery, sweet snacks, ice cream/frozen desserts and sweet beverages—show the importance of chocolate to the sweet sector. Within confectionery alone, according to IBIS World, chocolate accounts for about 50% of products. These products are grocery core—not fringe.
EU regulations add another layer of complexity
The situation could grow even more dire in less than six months, when the EU begins enforcing strict traceability rules on all agricultural products. Among other things, manufacturers in Europe no longer will be able to source cocoa from land that has been deforested in the past 10 years, Bearden says. That could drive up prices for the kind of chocolate manufacturers that source raw ingredients from regenerative and other eco-friendly operations in West Africa, which supplies about 60% of the world’s cocoa, and other regions.
Bearden described it all—cocoa prices, tariffs, looming EU rules—as a “perfect storm.”
Creative solutions in a challenging market
The maelstrom’s targets include younger brands like GoodSam Foods, a food CPG brand that prioritizes collaborating closely with small farms in the Americas and Africa to source the ingredients for all of its products, including chocolate.
GoodSam CEO Heather Terry says the brand’s close and long-term relationships with smallholder and indigenous farmers have helped the company navigate the challenges that first emerged last year, when cocoa prices began soaring. The company, she says, pays above fair trade prices, doesn’t rely on brokers and has made a commitment to regenerative agricultural practices with its farm partners.
But still, there’s no escaping market forces.
“We’ve had to get creative with inventory, cash flow and product mix,” she says. “We’ve shifted our SKU strategy, promoted formats that are more cost-efficient and communicated more than ever with our partners on the ground.”
One example of GoodSam’s pivot is its chocolate-coated products, including macadamias, mangos and pineapples. These products allow the company to still buy cacao and protect its suppliers and network. But they also offer consumers GoodSam products at lower prices.
Today’s volatility in the chocolate market, she says, “reinforces our belief that the future of food has to be relational, regenerative and transparent.”
Sustainability commitments tested
Tariffs, however, represent a more daunting challenge. As they target many developing countries, they “threaten the viability of ethical sourcing,” Terry says.
“When you penalize companies like GoodSam for importing ingredients from emerging economies, you’re not just raising costs—you’re destabilizing entire communities that depend on that income,” she says. “The threat of tariffs forces us to constantly rethink pricing, warehousing and logistics. It creates uncertainty for retailers and limits innovation. And let’s be honest—consumers are going to feel it, too.”
Both Alter Eco and GoodSam plan to stay the course—to bolster their commitments to farmers and sustainable agriculture as they continue manufacturing products. For Alter Eco, that means embracing its core principles: restoring ecosystems, improving livelihoods and reducing waste. The company helps farmers interplant crops such as bananas, coconuts and passionfruit with cacao, to give partners other sources of income while also improving ecosystems that support cacao. Alter Eco even makes its truffle wrappers backyard compostable.
The historic chaos in the cocoa market, however, does lower expectations, at least in the near term.
“We may get smaller before we get bigger again,” Bearden says.
*This article was updated on August 1 to reflect the new tariff imposed on Switzerland on July 31, 2025.
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