Mondelez International, the global food giant behind Cadbury and Oreo, has slashed its full year profit forecast, signaling that persistent high cocoa costs are finally weakening consumer demand for chocolate in key markets.
The company now expects adjusted earnings per share to fall by approximately 15 percent, a steeper decline than its previous projection of a 10 percent drop. This revision comes despite its third quarter net sales of $9.74 billion slightly beating analyst estimates. Wells Fargo, maintaining an Overweight rating on the stock, suggests inflation relief and an earnings recovery may not materialize until 2026.
The primary drivers are clear. Consumers in North America and Europe are growing more price sensitive, leading to softer demand for premium snacks and chocolate. Mondelez reported significant volume declines, with Europe down 7.5 percentage points and North America down 1.8 points. While there are early signs of stabilization, sustained pressure from cocoa and other input costs continues to squeeze margins. Company executives also warned of greater than usual volatility from geopolitical and trade uncertainty.
For cocoa markets, this signals a pivotal shift. The narrative is moving from pure supply driven panic to a new demand sensitive equilibrium. Consumers are trading down to smaller pack sizes and discounted formats, which could temper cocoa consumption growth in developed nations. This may make chocolate manufacturers more cautious in their bean purchasing, potentially softening near term demand.
Meanwhile, supportive price factors remain. ICE US port inventories have hit a seven month low of around 1.84 million bags. However, the London cocoa contract eased slightly last week, consolidating after recent gains. According to World Bank data, the average cocoa price in September 2025 was $7.03 per kilogram, down 7.6 percent from the previous month but still up 7.7 percent year on year. The high cost environment is pushing smaller US artisan chocolatiers to a breaking point, illustrating the widespread pressure across the industry.
