Confectionery predictions for 2025: Agritask

2024 was a high-stress year for the confectionery industry, from climate pressures drastically reducing crop yields to the uncertainty around EUDR.

Volatile markets, such as cocoa, could possibly drive companies to stockpile inventory to ensure availability and hedge against price swings.

We were able to talk with Ofir Ardon, chief business officer, Agritask, a crop supply intelligence company, about his predictions for 2025.

Liz Parker Kuhn: What will 2025 hold for the food industry, specifically the confectionery sector?

Ofir Ardon: In 2025, three key trends will emerge for the food industry. First, climate change will continue to make agricultural commodity supplies increasingly unpredictable, leading to fluctuating prices for key ingredients like cocoa, sugar, and nuts. This volatility will drive companies to focus on supply chain resilience and diversification.

Second, the confectionery industry will place a strong emphasis on ingredient quality as a key factor in consumer purchasing decisions. Companies will focus on delivering freshness, nutritional value, health benefits, and transparent sourcing practices. By offering premium quality ingredients, brands can differentiate themselves in a competitive market and meet the growing consumer demand for superior products.

Third, sustainability will remain a top priority, with companies adapting to climate impacts and consumer awareness. This will drive innovation in sourcing, packaging, and production methods to reduce environmental footprints.

LPK: How will markets like cocoa drive companies to stockpile inventory? What about ensuring availability and hedging against price swings?

OA: The cocoa market's continued volatility in 2025 will significantly impact the confectionery industry's inventory management strategies. Buyers will increasingly diversify their sourcing strategies to mitigate risks associated with price swings and ensure availability. This diversification will potentially weaken long-term connections with traditional suppliers as companies seek flexibility and cost advantages. Additionally, hedging strategies will evolve, with a focus on shorter-term contracts and more frequent market assessments to capitalize on price fluctuations.

Companies will also invest in technology for real-time market monitoring and predictive analytics to make more informed purchasing decisions. Some may explore vertical integration or direct farmer partnerships to gain more control over their supply chain. Additionally, the industry may see increased interest in cocoa alternatives or extenders to reduce dependency on volatile cocoa markets.

LPK: What will sustainability practices look like next year?

OA: Sustainability practices will increasingly focus on regenerative agriculture, which is gaining significant momentum across the food industry.

Regenerative agriculture will be characterized by practices that aim to restore ecosystems, improve soil health, and combat climate change. Practices such as cover crops, crop rotation, and reduced tillage will help improve soil structure, increase organic matter content, and reduce erosion, ultimately leading to more resilient and productive agricultural systems.

The implementation of technology-driven solutions will play a crucial role in enabling visibility and strengthening relationships throughout the supply chain. Advanced data analytics platforms will provide unprecedented insights into farming practices and their impacts. These technologies will foster transparency and trust between farmers, processors, and consumers, creating a more connected and accountable agricultural ecosystem.

Furthermore, there will be an increased focus on measuring and verifying the impact of regenerative practices. Tradtionally, food and beverage companies have based their sustainability reporting on ballpark estimates and industry averages. But as ESG reporting becomes more stringent, that will no longer be enough. Companies will need to shift to site-specific data collection. Remote sensing technologies, satellite imagery, and sophisticated data analytics will allow for more accurate assessment of soil health, carbon sequestration, and overall ecosystem improvement. This data-driven approach will not only validate the benefits of regenerative agriculture but also guide future improvements and investments in sustainable farming practices.

LPK: How will companies aim to diversify their supply chains?

OA: We expect confectionery companies to adopt a dual approach to supply chain diversification, balancing local sourcing with global expansion. They will increase local purchases to reduce transportation costs, support regional economies, and enhance supply chain resilience. Simultaneously, companies will expand their global portfolio to mitigate risks associated with regional climate events or geopolitical issues.

This seemingly contradictory strategy will work by creating a network of diverse suppliers across different geographical regions. Companies will maintain a mix of local and international sources, allowing them to quickly pivot between suppliers based on market conditions, prices, and availability.

Firms will also demand greater visibility into field operations, implementing advanced tracking technologies and data analytics to monitor crop health and sustainability practices. This increased transparency will enable better forecasting, quality control, and risk management.

Additionally, companies may explore vertical integration, investing in their own production facilities or forming strategic partnerships with farmers. This approach will provide more direct control over the supply chain and ensure consistent quality and availability of key ingredients.