Compare prices for Hershey's Chipits chocolate chips.
Chocolate chips are dominated by one input cost: cocoa. Roughly 70% of global cocoa beans are grown in West Africa, with Côte d'Ivoire and Ghana alone supplying close to 60% of world production in a typical year. Indonesia, Ecuador, Cameroon, Nigeria, and Brazil make up most of the remainder, with Ecuador in particular gaining share through the recent supply crisis as its CCN-51 cultivar offers higher yields and better disease tolerance than the West African Amelonado-derived stock. For a Canadian-market product such as Hershey's Chipits, the cocoa liquor and cocoa butter that go into the chip are blended from West African and South American origins through major grinders before being formulated into finished chocolate.
The cocoa harvest in West Africa runs in two windows. The main crop is harvested from October through March and accounts for the bulk of annual volume; the smaller mid-crop runs from April through September. Pricing for the 2024/25 and 2025/26 crop years has been benchmarked off these windows, with futures markets tracking weather, disease, and farmgate-price decisions in Abidjan and Accra closely. The Ghana Cocoa Board (Cocobod) and Côte d'Ivoire's Conseil du Café-Cacao set producer prices administratively each season; those farmgate prices feed directly into the world reference price.
Cocoa is the input that has reset the cost structure of every chocolate product on Canadian shelves over the past two years. ICE New York cocoa futures traded around USD 2,500 per tonne for most of 2022 and into early 2023. By April 2024 the front-month contract had spiked above USD 11,000 per tonne, an all-time record and roughly four to five times the long-run average. Prices remained elevated through 2024 into early 2025 before partially correcting as the 2024/25 main crop came in better than initially feared and the mid-crop arrived without further weather catastrophe. As of the 2025/26 crop year prices have settled into a still-elevated range well above pre-2023 norms.
Three structural drivers converged. First, El Niño-driven heat and erratic rainfall hit West Africa in 2023 and into 2024, reducing pod development. Second, cocoa swollen shoot virus disease and black pod disease have spread aggressively through aging Ivorian and Ghanaian orchards, with Ghana reporting that swollen shoot has affected hundreds of thousands of hectares. Third, smuggling of Ghanaian beans into Côte d'Ivoire, where farmgate prices were higher in some windows, distorted official receipt numbers and amplified the perceived deficit. Underlying all of this, decades of low farmgate prices have left growers under-investing in replanting, leaving an aged, lower-yielding tree stock just as demand from chocolate manufacturers has continued to grow.
The pass-through to retail shelf prices is partial and lagged. Manufacturers including Hershey, Mondelez, Mars, and Lindt forward-buy cocoa months to over a year ahead, so the full cost shock did not reach 2024 retail prices but began to flow through aggressively in 2025 product. Public earnings commentary from Hershey through 2024 and 2025 repeatedly cited cocoa input cost inflation as the primary driver of price increases and margin pressure.
The chocolate chip aisle reflects a cocoa value chain that is heavily concentrated at every step. Bean buying and grinding is dominated globally by Barry Callebaut, Cargill, Olam Food Ingredients (ofi), and Ecom; together these firms grind a majority of the world's cocoa and supply the chocolate liquor, butter, and powder that finished-goods manufacturers reformulate into branded product. Barry Callebaut alone is the world's largest manufacturer of high-quality chocolate and cocoa products and supplies most of the global confectionery and bakery industry as a B2B chocolate maker.
At the branded retail layer, the Chipits brand is owned and marketed by The Hershey Company. Hershey is the largest chocolate manufacturer in North America by revenue and operates a portfolio that includes Hershey's, Reese's, Kit Kat (under license in the U.S.), and the Chipits baking line specific to the Canadian market. Chipits has been positioned in Canada since the 1960s and is the category leader in retail baking chips by a wide margin, which means the SKU faces relatively limited price competition from private-label or competitor brands at most banners. Hershey's manufacturing footprint for North America is concentrated in U.S. plants — most notably Hershey, Pennsylvania; Stuarts Draft, Virginia; Memphis, Tennessee; and Robinson and Mount Pulaski, Illinois — following the closure of the company's Smiths Falls, Ontario plant in 2008. Chipits sold in Canada are therefore predominantly imported finished goods crossing the border from U.S. production.
A milk chocolate chip is roughly half sugar and roughly a fifth dairy solids by weight, alongside cocoa liquor, cocoa butter, soy lecithin, and flavouring. A semi-sweet chip skews higher on cocoa solids and sugar and lower on dairy. Sugar prices have been volatile through 2024 and 2025 on the back of weak Indian and Thai cane harvests, but Canada is unusual in sourcing the majority of its refined sugar from cane refined domestically by Redpath, Lantic, and Rogers, with raw cane drawn primarily from Brazil, Australia, and Guatemala. Sugar contribution to the chip cost has risen, but far less dramatically than cocoa.
Dairy inputs in Canadian-formulated milk chocolate flow through the supply-managed dairy system, which tends to insulate the dairy component from the kind of commodity-driven volatility seen in cocoa and sugar. Soy lecithin, the standard emulsifier, is a low-cost ingredient sourced primarily from U.S. and South American soy crushing.
Cocoa beans, cocoa liquor, cocoa butter, and cocoa powder all enter Canada duty-free under the Most-Favoured-Nation tariff schedule, and finished chocolate moving from the United States qualifies for tariff-free treatment under CUSMA when it meets the rules of origin. This treatment matters because Chipits sold in Canada is typically a finished good imported from U.S. Hershey plants.
Canada imposed 25% counter-tariffs on approximately CAD 30 billion of U.S. goods effective March 4, 2025, in response to U.S. tariff actions earlier that year. Effective September 1, 2025, Canada removed most of those counter-tariffs after the United States returned to honouring CUSMA-compliant tariff-free entry, retaining counter-tariffs primarily on steel, aluminum, and automobiles. CUSMA-compliant chocolate confectionery and baking products were affected during the March-to-August window in 2025 and have since returned to tariff-free flow. Any future re-imposition of broad-based U.S.-import counter-tariffs would land directly on this category, given the integrated cross-border manufacturing posture of Hershey and most other branded chocolate manufacturers serving Canada.
The European Union Deforestation Regulation (EUDR), which requires importers of cocoa, coffee, palm oil, soy, rubber, beef, and wood to demonstrate that the product was not grown on land deforested after December 31, 2020, is not Canadian law, but it directly affects global cocoa pricing and supply. EUDR compliance was originally scheduled to apply from December 30, 2024, was deferred by twelve months to December 30, 2025, and after further deferral now applies to large operators from December 30, 2026 and to small operators from June 30, 2027. The regulation has accelerated the bifurcation of the global cocoa supply into traceable and non-traceable streams, with traceable beans commanding a premium. Because Barry Callebaut, Cargill, and ofi all serve EU and North American customers from a partially shared bean pool, the cost of meeting EUDR traceability is being absorbed across the global grind and partially passed through to North American buyers including Hershey.
The U.S. Tariff Act Section 307 prohibits the importation of goods produced with forced or child labour, and CBP has issued Withhold Release Orders on individual cocoa shipments from Côte d'Ivoire in past years. The compliance regime that Hershey and other manufacturers have built in response — Cocoa for Good, Farmer Income Accelerator, third-party traceability — is a structural cost layered onto the bean before it ever reaches a North American grinder.
Chipits is positioned at the upper end of the Canadian baking-chip category and effectively functions as the default branded SKU at most national grocers. The product line tracked here spans three pack sizes and two formulations: a 250 g milk chocolate pack, an 835 g milk chocolate club-style pack, and a 925 g pure semi-sweet pack. The per-100 g price typically declines meaningfully from the 250 g to the larger packs, reflecting both packaging cost dilution and the standard club-channel price architecture. The semi-sweet 925 g SKU also tends to price differently than the milk chocolate 835 g despite a similar pack size, because semi-sweet uses more cocoa solids and less dairy, and cocoa is the input that has been inflating fastest.
Hershey has used its category leadership to push price increases through 2024 and 2025 to recover cocoa-driven margin compression. Public guidance from the company indicated price increases across the U.S. and Canadian portfolio in both years, and earnings commentary has framed 2025 as a year of price-led recovery rather than volume growth. For a category dominated by a single brand, the practical result is limited downward price pressure from competition.
Finished Chipits product moves from U.S. Hershey plants — most likely Stuarts Draft, Virginia or Robinson, Illinois for baking chips — through cross-border refrigerated or temperature-controlled trucking into Canadian distribution centres operated by the major grocery banners, then onward to Edmonton stores. Chocolate is heat-sensitive: bloom and texture defects develop above roughly 25 degrees Celsius, and the supply chain runs cool, particularly through summer. Edmonton's inland position adds overland distance and handling steps relative to coastal Canadian cities, and refrigerated trucking and fuel costs across Western Canada have continued to apply upward pressure on landed cost. Distribution-centre handling, slotting, and last-mile delivery to individual stores all sit on top of the manufacturer price.
The medium-term direction of retail chocolate chip prices in Edmonton depends primarily on the West African cocoa crop. The 2024/25 main crop came in stronger than feared and prices have partially corrected, but the structural problems — aged trees, swollen shoot disease, deforestation pressure, and chronic under-investment driven by low farmgate prices — have not been resolved on a five-year time horizon. Replanting cycles in cocoa run six to eight years from planting to first commercial harvest, so any supply response from current investment will not reach the market before the late 2020s. EUDR compliance costs and the broader traceability premium are durable additions to the cost base. Trade-policy noise on cross-border U.S. finished-goods flow is an episodic risk on top. Hershey's category dominance in Canadian baking chips means most of these costs will continue to flow through to the shelf rather than being absorbed by margin compression at retail.