Chocolates are gifts that keep giving—especially for the families at the helm of Mars and Ferrero Rocher chocolate empires, who are juggernauts in their own right.
Cocoa prices have skyrocketed recently as unfavorable weather has led to poor yields and a worsening supply crunch. That’s made chocolates more out of reach for the average shopper in grocery aisles.
But that’s been great for the world’s biggest chocolatiers, as they’ve been able to pass on higher raw-material costs. The profits of chocolate companies—and their empires—have swelled so much that they exceed the entire GDPs of cocoa-producing nations.
The collective wealth of the Ferrero and Mars families has soared to $160.9 billion, outsizing the summed-up GDPs of the leading global cocoa centers, Ghana and Ivory Coast, according to an analysis by British nongovernmental organization Oxfam International.
Their economies add up to roughly $144 billion, according to World Bank data from 2022. The family’s wealth figures are based on the Forbes Billionaires List.
Meanwhile, profits from chocolate sales at Lindt, Mondelez, Nestlé, and Hershey’s have risen to $6 billion total, with about 97% of the income going back to shareholders, Oxfam found.
While that bodes well for chocolatiers, the cocoa farmers haven’t been as lucky.
“As long as the value coming out of cocoa goes to the profits of chocolate companies who pay it out to shareholders or owners, and farmers aren’t getting their fair share, farmers will not be able to earn at least a living income, invest in their farms, send their children to school, let alone thrive,” Oxfam policy officer Anouk Franck told Fortune.
The disparity underscores a long-drawn tussle in the cocoa industry of big chocolate companies doing little to improve farmers’ plight. The profits of chocolate companies have continued to rise as farmers have continued to muddle through harsh conditions.
Other structural issues involving middlemen in the industry further complicate the cocoa value chain. The poor prices and yield are forcing many of them to drop cocoa production altogether, Oxfam said.
Awareness of making the cocoa industry more equitable has recently increased, with brands like Tony’s Chocolonely taking a stand against big chocolate makers. However, concerns over the unethical practices in the industry could take years to address.
“We agree, cocoa farmers and their families should earn an income that enables them to maintain a decent standard of living,” a Nestlé spokesperson told Fortune, pointing to the company’s Income Accelerator program that helps support cocoa farmers.
Jeffrey Greenberg—Education Images/Universal Images Group/Getty Images
A closer look at the chocolate empires
If reality were anything like the movies, the “Charlie” running the big chocolate factory would be the Mars empire.
The family business, founded in 1911, is now the world’s biggest chocolate company, making confectionaries like Snickers, Twix, and Skittles.
Estimates of the third- and fourth-generation heirs’ wealth add up to $137 billion, according to the Bloomberg Billionaires Index. Six family members share ownership at the American company, with each of their wealth estimates ranging from $11.4 billion to $45.6 billion.
The closest family business that compares to Mars is that of the Ferreros.
The Italian Ferrero empire, which makes Nutella, Ferrero Rocher, and Tic Tacs, is the country’s wealthiest family—ahead of home-grown luxury fashion and automotive groups.
Giovanni Ferrero and his family are worth $40.4 billion, according to the Bloomberg Billionaires Index.
Ferrero is the world’s second-largest chocolate maker. It’s controlled by the Luxembourg-based holding group Ferrero International.
Both companies have initiatives to ensure that cocoa is sourced sustainably and rewards the farming community.
It’s unclear if these chocolate giants contribute to helping farming communities in cocoa-producing countries proportionately as profits grow, particularly amid a supply crisis.
Representatives at the chocolate companies didn’t immediately return Fortune’s request for comments.
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FAQs
The collective wealth of the Ferrero and Mars families has soared to $160.9 billion, outsizing the summed-up GDPs of the leading global cocoa centers, Ghana and Ivory Coast, according to an analysis by British nongovernmental organization Oxfam International.
Why are chocolate prices rising? ›
A combination of low rainfall, plant disease and aging trees led to a disappointing crop in Ivory Coast and Ghana in 2023. The two countries produce about two-thirds of the world's cocoa, so the shortage hit the global market hard.
Which two countries grow the most cocoa? ›
Most cocoa is produced in West Africa
Côte d'Ivoire and Ghana are by far the two largest cocoa growing countries, accounting for nearly 60 % of global cocoa production, followed by Ecuador with 9 %. In Asia, Indonesia is the largest producer country.
Why is there a cocoa shortage in 2024? ›
The simplest explanation for the ongoing cocoa shortage is extreme weather, heightened by climate change. Exceptionally hot and dry conditions in West Africa, partly driven by the current El Niño event, have led to reduced yields.
Which country is the largest producer of chocolate in the world? ›
The Ivory Coast and Ghana are by far the two largest producers of cocoa, accounting for more than 50 percent of the world´s cocoa. In 2021, the Ivory Coast alone produced approximately 2.1 million metric tons of cocoa beans.
Why are cocoa prices skyrocketing? ›
The rise in cocoa prices is largely due to a global cocoa shortage. Climate change-induced drought has ravaged crops in West Africa, which contributes around 80% of the world's cocoa output. According to the International Cocoa Organization, global cocoa supply will decline by almost 11% over the 2023/2024 season.
Why is Hershey's increasing the price of their candy? ›
Hershey raised its candy prices last year to offset rising costs and last month implemented what it called a “small” price increase for grocery store items such as chocolate baking chips and syrup. But there may be a limit to how high prices can go.
Where does most of us' chocolate come from? ›
The primary growing regions are South America, Southeast Asia and West Africa. While cacao grows all over the world, according to the International Cocoa Organization, over 60% of the world's production comes from just two West African countries: Ghana and Côte d'Ivoire.
Why is cocoa so expensive? ›
The world is facing the biggest deficit of cocoa in decades. Most of cocoa beans are grown in West Africa, about two-thirds of them, and most of it in Ivory Coast and Ghana. And farmers there have been facing extreme weather, changing climate patterns, which have just decimated crop harvests.
Where does Hershey get their cocoa? ›
The cocoa used by our cocoa product suppliers comes from several countries, including Brazil, Cameroon, Côte d'Ivoire, Colombia, Dominican Republic, Ecuador, Ghana, Indonesia, Nigeria, Papua New Guinea and Peru.
Global Hotspots for Cocoa Production
With 2.2 million tonnes of cocoa in 2022, Côte d'Ivoire is the world's largest producer, accounting for a third of the global total. For many reasons, the cocoa trade in Côte d'Ivoire and Western Africa has been controversial.
What is the disease in the cocoa bean tree? ›
The damaging virus is attacking cacao trees in Ghana, resulting in harvest losses of between 15 and 50%. Spread by small insects called mealybugs that eat the leaves, buds and flowers of trees, the cacao swollen shoot virus disease (CSSVD) is among the most damaging threats to the root ingredient of chocolate.
Why is cocoa not sustainable? ›
Cocoa farmers usually clear tropical forests to plant new cocoa trees rather than reusing the same land. That practice has spurred massive deforestation in West Africa, particularly in Ivory Coast. Experts estimate that 70% of the country's illegal deforestation is related to cocoa farming.
What medical uses is cocoa used for? ›
People most commonly use cocoa for heart disease and high blood pressure. It is also used for high cholesterol, memory, aging skin, and many other conditions, but there is no good scientific evidence to support these other uses.
What country loves chocolate the most? ›
Switzerland holds the distinction of consuming the most chocolate per capita. The Swiss are renowned for their love of chocolate, a reputation well-supported by statistics showing their high consumption levels.
What's going on with chocolate? ›
Double-digit production declines are forecast for cocoa crops in Ivory Coast and Ghana, which account for about 50% of supplies. The shortage is so severe that both countries are rolling contracts to future harvests.
Why are chocolate bars so expensive now? ›
The cacao shortages affect all chocolate products, so you can expect to see prices jump across the board. That said, exact prices depend on how much cocoa is actually in your chocolate bar of choice. Dark chocolate, for instance, tends to have a higher concentration of cocoa than milk chocolate.
Why are candy prices going up? ›
Why is candy so expensive? Beyond overall inflation, which rose 3.7% year over year since September 2023, there are a few more reasons why candy is so expensive right now. The cost of raw sugar reached an 11-year high in April, per CNBC, due to the effects of extreme weather on the crop, as well as rising demand.
What is the outlook for the chocolate market? ›
Revenue in the Chocolate Confectionery market amounts to US$133.60bn in 2024. The market is expected to grow annually by 4.61% (CAGR 2024-2028). In global comparison, most revenue is generated in the United States (US$23,210m in 2024).
