How much does it cost to manufacture a chocolate bar from a company like Hershey?

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Listener Adria Banks from Denver asks:

I've always wondered how much it costs to produce a single Hershey chocolate bar. I've been trying to find out since a neighbor's child and I discussed the basics of selling a product: production cost, wholesale, markup, and so on. He thought a chocolate bar would cost a dollar to make; I guessed 10 cents. Is either of us close? Thanks!

With cocoa prices rising dramatically in recent years, indulging in a chocolate bar has gotten more expensive.

Over the summer, Hershey Co. said it would raise the price of its chocolate due to increasing cocoa costs, which had tripled in 2024 due to disruptive weather. In a May 2025 earnings call, Hershey also said it was altering its “price pack architecture,” which usually entails downsizing a product while keeping prices in the same in a practice known as shrinfklation.

To keep down costs, some candy companies have also skimped on chocolate and experimented with flavors like pumpkin spice latte and peanut butter-berry. 

Cocoa futures have plummeted since last year and are now trading at around $5,000 a ton, although prices are still significantly up since the pandemic. 

While we don’t know how much Hershey specifically spends on producing chocolate, we have some back-of-napkin estimates on how much a large-scale manufacturer might spend thanks to Alexis Villacis, an assistant professor of agricultural economics at Ohio State University.

He joined Marketplace to help us break down the costs of a generic chocolate bar.

Graphic: Janet Nguyen/Marketplace and kyoshino/Getty Images

When companies manufacture chocolate, most of it is sugar, especially if you’re talking about mass-produced chocolate, like a Hershey’s bar, M&Ms or a Snickers, Villacis said.

At least 50% consists of sugar. Chocolate also requires, of course, cocoa, which can take many different forms. Sometimes it’s cocoa butter, cocoa solids, cocoa liquor or cocoa paste. Mass-produced chocolates typically contain less than a quarter of actual chocolate, Villacis noted.

Bars also contain other ingredients, like milk and emulsifiers, Villacis said.

So if you’re making a bar that weighs around 50 grams or about 1.8 ounces, the ingredients will cost between 12 and 20 cents, Villacis said. (A standard Hershey’s bar is about 44 grams, or 1.55 ounces, so rounded up to 50 grams.)

Big companies like Hershey will be able to buy these ingredients at a cheaper price due to economies of scale, Villacis explained. 

Then you need to take into account packaging, like the foil, the wrapping and the printing costs. That might cost around 4 cents, Villacis said. 

You have to factor in labor, which could cost 1 cent. Even though big chocolate manufacturers have automated production lines, you still need people to control these machines, taste the products and ensure that production is going smoothly, Villacis said. 

Chocolate manufacturers also have to pay for energy costs, overhead and maintenance, which might cost 1 cent. The cost of waste adds about another 2 cents. 

After the bar has been made and packaged, you then need to transport it, amounting to 1 cent. 

When you add everything up, it’s about 21 to 29 cents per chocolate bar. The retail price of a Hershey’s bar that’s 1.55 ounces can range between about $1.50 and $2. 

“The cost of the actual food is not that high. But then we need to add all of these steps in the food value chain that increases the cost,” Villacis said. 

Cocoa beans normally cost between $2,000 to $3,000 per ton, but have jumped to as high as $12,000 in recent years, Villacis said. Rising prices will have more of an impact on high-end or premium chocolate, which uses more cocoa beans, Villacis noted. 

Kristin Thalheimer Bingham, who co-owns Dean’s Sweets in Portland, Maine with her husband, said that it costs the business at least $1.95 to make a bar that’s around 1 ounce. Because it’s a small business, they aren’t purchasing the volume of chocolate that a large manufacturer can, which pushes up their costs. They also source high-quality chocolate without preservatives or artificial flavors.

Rising cocoa prices and tariffs have been challenging, Bingham said. But tariffs for some popular products, like cocoa, ended in November and cocoa future prices have gone down, which may bring relief to small business owners. 

Even though cocoa prices have been volatile, the appetite for chocolate hasn’t. “Demand for chocolate keeps increasing,” Villacis said.