The chocolate business has been hit from multiple angles as consumers pulled back spending just as cocoa prices climbed and labor costs went up.
That has impacted even the largest brands in the space.
“In 2025, our team demonstrated remarkable agility and execution, successfully navigating a year marked by unprecedented cocoa inflation and broader macroeconomic volatility,” Hershey CEO Kirk Tanner said during his company’s fourth-quarter earnings call.
Cocoa prices have come off all-time highs, but they remain elevated, which has actually eroded demand, according to Tracey Allen, agricultural commodities strategist at J.P. Morgan.
“The hangover from last year’s fourth-quarter highs in cocoa prices has come to roost…This reflects a historic increase in the cost of doing business and a decline in cocoa bean availability, which has weakened industrial demand in an environment where cost pass-through is often limited by supermarkets and retailers,” she said.
Add that to consumers cutting back on luxury spending and higher labor costs, and you have created an operating environment that has led Dallas’ acclaimed Kate Weiser Chocolate to close its stores and end its business.
Kate Weiser Chocolate shutting down
A Dallas-area staple for 12 years that also shipped its artisan chocolates nationally, Kate Weiser Chocolate has decided to close down. Weiser, who founded the brand after attending the California Culinary Academy, blamed the economy for the closure.
“Our business is highly seasonal, labor-intensive, and over the last few years has required a heavy financial lift to keep operating,” Culture Map Dallas reported.
The company shared a farewell note on its website.
“We want to thank our incredible community for 12 wonderful years of support, joy, and shared moments of chocolate. Our final day to place online orders will be Wednesday, April 15th, and we would be honored to sweeten your homes one last time,” it posted.
Weiser made Oprah‘s “Favorite Things” list in 2025 with her “Carl the Snowman” hot chocolate kit, consisting of a hand-painted chocolate snowman filled with marshmallows, which melts into a rich and creamy hot cocoa when added to warm milk.
The chain will close all its retail outlets on April 15 as well.
“While this is not the outcome I had hoped for, I am deeply proud of what we created and incredibly grateful for the lessons, relationships, and experiences that came with it,” Weiser said. “I’m looking forward to applying those lessons to the next chapter and building something memorable again in the future.”
More than cocoa prices have hurt chocolate companies
Weiser is not alone in feeling the pain of high cocoa prices, but that’s not the only headwind facing the industry. Americans are cutting back on luxury and other nonessential spending.
“Among all U.S. adults, 39% say they plan to spend less on dining out, 39% plan to cut
back on live entertainment spending (i.e., concerts, sporting events, and theater
performances), and 38% intend to decrease their travel spending this year,” according to a survey conducted by Bankrate.
The spending cuts come as U.S. consumers feel stressed due to higher prices.
“The cumulative effects of inflation and high interest rates have been straining households, contributing to record levels of credit card debt and causing consumer sentiment to plummet,” explained Bankrate Senior Industry Analyst Ted Rossman.
More Chocolate and Candy Closures:
- Key candy company files Chapter 11 bankruptcy in Halloween week
- Beloved candy company closes corporate office, lays off dozens
- Hershey rivals find a solution to chocolate’s biggest crisis
Another upscale chocolate retailer and restaurant, New York’s Max Brenner, filed for Chapter 11 bankruptcy earlier this year.
“Max NY Union Square LLC, a New York, NY-based full-service restaurant and confectionery retailer, filed for chapter 11 protection on February 10, 2026, in the Southern District of New York,” according to court filings in the U.S. Bankruptcy Court for the Southern District of New York.
Documents published on PacerMonitor confirmed that bankruptcy filing.
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Cocoa prices have fallen (finally)
While there has been a recent downtrend, J.P. Morgan Global Research expects cocoa prices to remain structurally higher for longer.
“Amid multi-season availability constraints, we hold our medium-term price forecast at $6,000/tonne while the market finds balance, which is likely to be approaching in 2025/2026,” Allen said.
In response to higher costs, both in cocoa and labor, chocolate companies around the world have been shrinking their products and raising their prices.
“Across western Europe, prices for bars have increased more than 50% since 2021 and by 18% since last year. A dramatic shift for a category built on affordable indulgence,” Julia Buech, senior consumer foods analyst at Rabobank, told The Guardian.
Mondelez International CEO Dirk Van de Put did share some hopeful news. for the industry during his company’s fourth-quarter earnings call.
“What is good in all of this is that cocoa now has returned to a level that is much more in line with the historic price that we’ve seen. And that bodes very well for 2027. As I said, we’re already covered for 2026. There’s not a lot we can do anymore, but 2027 certainly will benefit from this,” he said.
Related: After Chapter 11, iconic sports bar chain closes more restaurants
