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Cocoa reformulation: Will chocolate brands return to cocoa butter?

Many brands switched to cocoa butter alternatives when cocoa prices spiked in 2024. With prices falling, will they return to cocoa butter? It depends, says one expert.

The price of raw cocoa may have crashed to around $3,300 (€2,800) per tonne from its 2024 peak above $12,000 (€10,200), but chocolate retail prices across the EU remain significantly higher year on year.

The question is now whether the reformulation wave triggered by the 2024 price spike will unwind, or if it has permanently changed how chocolate is made.

According to Oran van Dort, commodity analyst at Dutch agri-finance group Rabobank, the answer depends on the product.

Why chocolate remains expensive despite cheaper cocoa

“Typically, the lag between cocoa prices and retail chocolate prices is around six to nine months, though in practice it tends to be closer to nine months," van Dort told Ingredients Network. “A decline in paper prices does not translate immediately into lower shelf prices, given differences in pricing cycles, inventory management, hedging strategies, and contractual arrangements across participants in the value chain.”

Many chocolate manufacturers are still using up cocoa stocks purchased before the crash, and chocolate prices are not determined by cocoa alone – energy, transportation, and labour costs all contribute.

Van Dort explained that he did not expect a significant decline in chocolate prices in the near future. Looking to 2027, he anticipated prices will likely rise again, driven by higher inflation and rising energy costs.

“While retailers could theoretically lower prices later this year in response to cheaper cocoa, it may be strategically simpler to keep prices stable now and implement a more modest increase next year,” he said.

Premium chocolate brands might switch back to cocoa butter

The reformulation decisions made during the price spike will likely not reverse uniformly. van Dort expects a partial return to cocoa butter, but only in specific categories.

"Premium products, along with chocolate bars where mouthfeel and overall sensory experience are especially important, are likely to be the first to switch back to cocoa butter," he said.

However, any reversal will be slow. Reformulation decisions are structural, requiring internal approvals, sourcing adjustments, and production process changes. van Dort said he would not expect meaningful changes for at least another year.

For compound chocolate and coatings that switched to vegetable fat-based cocoa butter alternatives, the shift is more likely to be permanent.

“This is particularly true for products that did not experience a noticeable decline in sales following the switch to cocoa butter alternatives but did benefit from lower costs and reduced exposure to cocoa price volatility," he explained.

Major confectionery brands, including Nestlé have already dropped the word “chocolate” from some UK products such as Toffee Crisp and Blue Riband after reducing cocoa solids below the 25% legal minimum, replacing cocoa butter with vegetable oil and describing the coating as "milk chocolate flavour".

Cocoa-free chocolate is moving from lab to shelf

Beyond the cocoa butter alternatives already embedded in production, the cocoa-free pathway is being explored by many brands. van Dort pointed to upcycling, cell-cultured cocoa, and fermentation-based approaches, each with a distinct value proposition.

“Of the three, fermentation-based solutions are furthest along and already entering branded products, making it the most immediate route for adoption,” he said.

It is not something forecasted for the future either; it’s already happening.

Nestlé, the same company removing cocoa butter from existing lines, launched a completely cocoa-free range in April 2026, Choco Crossies “Snack Vibes”, made with ChoViva, a fermented sunflower seed ingredient from Germany-based Planet A Foods.

ChoViva is now in more than 120 products across ten countries, with partners including Swiss chocolate manufacturer Lindt and Belgian cocoa processor Barry Callebaut.

van Dort characterised current investment in cocoa alternatives as companies "fixing the roof while the sun is shining", meaning they are building viable alternatives now so they are ready if or when the next supply crisis hits.

Cocoa supply recovery is happening, but it is fragile

RaboResearch, Rabobank's commodity analysis division, forecasts surpluses of approximately 300,000 tonnes for both the current 2025/26 cocoa season and the 2026/27 season starting in October.

Cocoa stocks held in warehouses certified by the Intercontinental Exchange (ICE), the main global trading platform for cocoa, have risen to a 19.5-month high, reflecting improved supply conditions.

The cocoa market’s prolonged climb to record prices was described by van Dort as a “bull rally”. He explained that high prices “led to destruction in demand and higher production”, and while prices were elevated, farmers expanded planting outside Côte d'Ivoire and Ghana.

However, structural supply-side concerns in West Africa persist. The forecast assumes normal weather, and van Dort cautioned that it is too early to predict how the surplus or deficit scenario will play out, given variables including weather patterns, the pace of demand recovery in what he described as "a GLP-1 environment", and planting volumes during the bull rally.