The quick take:
- Cocoa, the main cost in chocolate, is down by more than half from its 2024 peak.
- Halloween candy still costs more than last year, and chocolate is up the most.
- Prices go up fast and come down slow. Shoppers notice, and some are switching to cheaper candy.
In 2024, cocoa, the bean chocolate is made from, hit more than $12,000 a ton. Chocolate makers raised prices and told everyone why. Then cocoa crashed. By last week it was trading around $5,500, less than half the peak.
So this Halloween’s chocolate got cheaper, right? Nope. A 100-piece bag of Halloween candy costs $16.96 this year, up 3.5% from last year and 71% from 2021, according to a WJLA report. Financial strategist Bill Dendy put chocolate up 11% to 12%, compared with about 5% for gummies and hard candy.
It’s not just the bags. Government data shows candy and gum prices were up 8.1% in August from a year earlier, more than double overall inflation of 3.4%.
Wait, Why Don’t Prices Come Back Down?
Part of it is timing. Big chocolate makers buy cocoa months ahead through contracts, so the candy on shelves this October was made with cocoa bought when prices were still high. Other costs moved up too. Dendy pointed to sugar, packaging and transportation.
But part of it is that a price, once raised, is easy to keep. Hershey raised prices by as much as 20% during the cocoa spike, according to a January analysis from Barchart, which called what comes next “price retention”: costs ease, shelf prices stay put, and margins pop. Economists have a name for the pattern. Prices go up like a rocket and come down like a feather.
And there’s the quieter version: smaller bags. InvestorsObserver found the same candy budget buys about 40% less candy than it did in 2020.
Shoppers Are Doing the Math
Americans will still spend about $4.1 billion on Halloween candy this year, according to the National Retail Federation, which says shoppers are “approaching the season with affordability in mind.” More than a third plan to compare prices if things cost more than expected. WJLA reports people are moving toward hard candy, gummies and gum, the stuff that didn’t get the chocolate markup.
That’s the risk with feather-slow price cuts. Customers can’t see your contracts or your packaging bill. They can see headlines saying your biggest cost fell by half, and a price tag that went the other way.
Before Your Next Meeting
You don’t have to sell chocolate to face this. Every business that raised prices in the last three years will. What would you do?
- The cost that justified your last price increase just fell by half. Do you cut prices, hold them, or run a promotion? Holding keeps the margin. Cutting might win back customers who noticed. Which matters more to your business this year?
- Your customers read the same headlines you do. What do you tell them? Chocolate makers explained their increases loudly. Would you explain why prices haven’t come back down, or say nothing?
- Your buyers are switching to the cheaper option on the shelf next to you. Do you follow them? Shoppers are moving from chocolate to gummies and hard candy. Do you have a lower-priced product ready for customers who trade down?
