Chocolate Industry 2026 Update
Our primary focus at Madison & Wall relates to all things advertising, and we love studying individual marketer categories, especially when those industries are significant advertising segments which produce delicious products.
The chocolate industry is one such category, and not coincidentally, ties into our annual Chocolate Marathon in Paris (this year on Sunday June 28, just after the end of the Cannes Lions. Contact us at brian@madisonandwall.com for details if you would like to join us. It’s not a running marathon, but a day-long group walk across Paris visiting a large number of some of the world’s best chocolateries).
The Chocolate Industry Continues To Post Robust Top-Line Growth Rates
For a sense of the scale of the global chocolate business, manufacturer Mondelez recently published data from Euromonitor indicating the industry’s revenue amounted to $147 billion during 2025. If, after deducting for retailers’ gross margins, manufacturers received more than $100 billion of that figure and allocated 5% of their revenue to advertising (Hershey’s company-wide advertising expense to revenue ratio amounted to 5.2% last year and at Mondelez the figure was 4.3% for reference), we can estimate that the category would have been responsible for around $5 billion in annual spending on media owners, or about half a percentage point of the world’s total.
But how fast did the industry grow in 2025 at a packaged goods manufacturer level (rather than at the level of the pure retailer or the level of stand-alone producers of the raw ingredient commodities, none of which will be as significant for advertising)?
Looking at a composite of significant publicly listed companies or segments from within the industry, we can see that organic growth accelerated meaningfully in 2025. Collectively Hershey’s North America Confectionary business, Lindt & Sprüngli, the chocolate segment at Mondelez, and the chocolate business at Nestlé represented $39 billion in revenue last year. Within this group we can quantify a simple weighted average of 9% organic growth during 2025, up from 5% growth in 2024 and similar high-single/low-double digit rates in 2021, 2022 and 2023.
Source: Madison and Wall analysis of company reports
Among the group, Nestle, Mondelez and Lindt fared best last year with organic growth ranging from 8-12%. Hershey continues to lag as it has over the past few years. One explanation for the gap in growth may be the combination of Hershey’s skew towards North American mass market chocolate vs. others who may sell in the mass market, but with much less exposure to the US where chocolate is not consumed as a staple in the way it is in many European markets. Illustrating the point, Lindt’s North American business (which is skewed towards the Lindt and Ghiradelli brands with Russell Stover representing a small share) grew at an 8.9% organic pace in 2025, rebounding from 2024’s 3.6% level. By contrast, the growth rates from Nestle and Mondelez primarily reflect revenues generated in other markets for their mass market offerings.
1Q26 trends have generally produced similarly robust top-line growth rates among the manufacturers who report results on a quarterly basis: for that period, Hershey’s North America Confectionary business grew by 8% organically, for the best pace of expansion recorded since early 2024. Mondelez’ chocolate business was also “solid” rising by 5.5%, although this was below any pace of observed growth since the early pandemic era of 2020. Meanwhile, Nestle’s confectionary business persisted at a high single digit organic growth level in what appears to be a 5+ year trend of generally high single digit growth.
What’s Driving This Growth?
Looking at some of the industry’s underlying trends, growth has been led by pricing increases rather than volume gains in recent years, catalyzed by significant increases in the price of chocolate’s main ingredient, cocoa, attributable to a mix of changes in climate, plant disease and government policies in west Africa (Ghana and Cote d’Ivoire, which are the industry’s biggest producers).
For a sense of scale, after many years of relative stability with prices generally under USD$3,000 per ton, the price of the raw, dry beans rose and peaked above USD$11,000 per ton at the end of 2024. Put differently, before accounting for costs to roast, transport and blend the cocoa (let alone final manufacturing, packaging, distribution, marketing and retailing), $11,000 per ton equates to approximately $0.61 of raw ingredient costs for every 50 grams (i.e. the size of a typical mass market candy bar) while $3000 per ton range equates to closer to $0.16 per bar. Other ingredients typically include sugar and milk products along with nuts or other “inclusions,” but cacao commonly accounts for 30-70% of a chocolate bar’s weight.
Source: Factset
Profits Are Generally Weak At The Present Time
In response to rising input costs, manufacturers took various steps to mitigate the effect on their own profitability by reducing the cocoa content in their products or by developing different sizes and mixes of goods in their SKUs (i.e. “price-pack-architecture”).
Indeed, despite higher consumer prices, chocolate-related profitability is generally down. For example, Hershey’s North America confectionery business posted an operating margin of 26% in 2025, below levels more typically above 30%, while Nestle’s confectionery segment was just under 12% in 2025 despite usually running several percentage points higher. Interestingly, Lindt managed to increase its global operating income margin to 16.4% during 2025 (from 16.2% in 2024) and also increase its margin in North America to 13.7% during 2025 (from 13.0% in 2024 and much lower levels in prior years) which the company attributed to reduced personnel costs and supply chain improvements.
Based on the latest data provided by the companies who reported during 1Q26, it appears that manufacturers will continue to sustain high prices for their goods, although it’s worth noting that manufacturers are undoubtedly working through inventory purchased at recent highs. But will prices eventually fall to reflect lower commodity costs? Our guess is probably not, even if profitability returns to higher levels.
Long-Term Growth Trends Look Favorable
Through this period of rising prices, consumers have demonstrated a favorable degree of elasticity of demand for chocolate. Spending is clearly up despite higher prices and other trends, such as the rising availability of GLP-1 drugs. This means that manufacturers will be able to look for other ways to essentially grow into the product’s demand. It could occur by increasing marketing to encourage consumption shifts or new use cases (towards those ends, on its 1Q26 earnings call in April, Hershey CFO conveyed expectations for a pick up in media spending through the second quarter and second half), investing in product innovation (new offerings such as “Dubai” chocolate or ruby chocolate), by raising the quality of their products (with different sources of cocoa beans or greater volumes of the same in each product) or by increasing the sizes of individual products.
We’ll do further in-person research to explore how the premium end of the market in Paris is managing itself during our Chocolate Marathon in June. Please join us!