Who Is Really Exposed To Cocoa On The TASE: Where Exposure Is Direct, Where Relief Is Delayed, And Where The Link Is Too Weak

Before The Companies: What Actually Happened In Cocoa

To understand which companies should benefit from lower cocoa, the starting point is not only the commodity itself, but also the gap between the commodity chart and reported numbers. Anyone looking only at the screen could quickly conclude that Carmit and Strauss should already be close to a sharp margin relief. That is only a partial reading. Lower cocoa creates profit potential, but it does not by itself determine when the benefit reaches cost of goods sold, how much of it stays with the company, and how much is absorbed by hedging, pricing, or trade terms.

Over the last two years, cocoa moved from acute shortage and extreme price inflation in 2024 to a sharp correction into 2026.

The move higher was driven mainly by supply damage, especially weak crops in West Africa. Once the market understood that Ivory Coast and Ghana were facing more than a one-season issue, cocoa repriced violently upward. Later, as demand softened, grindings data weakened, and expectations for the 2025/26 crop became less extreme, the market moved into a steep correction.

This is the core point. Lower cocoa on the screen is not the same as lower cocoa in the P&L.

That gap comes from four main factors:

• procurement and inventory: goods sold today often reflect cocoa bought at older and higher prices
• hedging: protection built during the spike can delay the benefit even after the market turns lower
• pricing: many companies already raised prices and will not rush to return the full benefit to the consumer
• other costs: cocoa is important, but not the only component inside the product cost base

So the right question is not only whether cocoa fell. It is where that decline truly sits inside cost of goods sold, and how fast it can reach reported profit. Put differently: not everyone selling chocolate will benefit, and even those who do will not show it at the same speed.

Methodology: Not Everyone Who Sells Chocolate Is A Cocoa Stock

The first mistake is to assume that everyone selling chocolate is also a cocoa stock. The second is to assume that the companies that are exposed will all show the benefit at the same pace and with the same intensity. Both assumptions are too broad.

For a TASE company to belong in a real cocoa thesis, the filings need to show at least one of two things:

• a clear link between cocoa and cost of goods sold, hedging, inventory, or profitability
• or a chocolate business large and separately disclosed enough to test how the commodity move reaches the business

Once that filter is applied to FY2025 filings, the universe shrinks quickly. In practice, direct and measurable cocoa exposure is concentrated mainly in:

• Carmit
• Strauss

Around them there are other names connected to chocolate on the shelf, but not to cocoa as a reportable commodity driver:

• Diplomat
• Globrands
• food retailers such as Shufersal, Rami Levy, Yochananof, and Tiv Taam

That distinction matters. At Carmit and Strauss, cocoa sits inside the profit engine itself. At distributors and retailers, cocoa usually sits first with the upstream supplier, then flows through list prices, promotions, and commercial negotiations.

Carmit: Not Just Exposure To Cocoa, But Operational Dependence

Among TASE names, Carmit is the cleanest direct case.

Why This Is The Clearest Direct Exposure

Its FY2025 report shows that cocoa and cocoa derivatives are not a side input but the heart of the business. The company states that cocoa products represented about 54% of total raw-material consumption in 2025, versus about 56% in 2024. That is unusually high dependence for a listed industrial company.

The annual report also makes clear that chocolate is not a marginal category. Carmit discloses a dedicated chocolate segment serving consumer, industrial, professional, and export markets. It produces molded chocolate, liquid chocolate, spreads, coins, tablets, snacks, and coated products. Just as important, the report says sales growth in the segment was mostly price-led, with no material change in volume terms.

Where Value Starts To Form

That makes the 2025 pattern clear:

• cocoa fell on the exchange, but not enough to fully rebuild margin
• Carmit kept adjusting prices and defending economics
• volumes were broadly flat
• lower commodity pressure was partly offset by procurement and trade friction

That is where Carmit’s strength and weakness come from at the same time. On one hand, this is the company where lower cocoa should reach the economic core of the business most directly. On the other hand, it is also the company where every commercial or financing friction can take back part of the benefit before it shows up in profit.

The strength is obvious: if cocoa stays lower for long enough, the earnings effect should be material. When more than half of the raw-material bill is tied to cocoa products, a sustained decline can change the economics of the business.

Where The Benefit Gets Stuck

The weakness is that the report also shows why the benefit does not pass through automatically. Carmit says its cocoa supplier continued to require additional collateral and accelerated payment terms. So the real issue is no longer only the quoted cocoa price. It is also the price of financing, collateral, and supply certainty.

The company also began integrating CBE, a cocoa butter equivalent, into part of its recipes. That is a defensive move. It shows Carmit did not wait passively for lower cocoa. It tried to create raw-material flexibility on its own. It also suggests that management still does not treat the old cost structure as fully normalized.

So Carmit is a direct cocoa stock, but also a clear example of why a falling commodity first creates economic value and only later, if trade terms and working capital allow it, turns into accessible reported value.

Strauss: High Exposure, But Slower Transmission

Strauss is a very different case. Cocoa matters a great deal there too, but inside a much broader group and a business segment that has to absorb more noise from hedging, pricing, and product mix.

Why The Exposure Is Real, But Not Pure

In its FY2025 report, Strauss states that in the indulgence segment, cocoa and cocoa derivatives were the main raw material and represented more than 52% of raw-material and packaging purchases in the segment. That is clearly material, even if it is not the whole group.

The filings then give the three most important numbers:

• average cocoa prices declined about 9% in 2025
• in Q4, the decline was much sharper, about 39% versus the comparable quarter
• yet indulgence EBIT still fell from NIS 44 million to NIS 12 million

Why The Chart Has Not Reached EBIT Yet

That is why Strauss cannot be analyzed in the same way as Carmit.

At Carmit, the question is whether relief will finally arrive. At Strauss, the question is why even the first stage of relief did not yet show up clearly enough in the numbers.

The answer has three layers, and all of them matter because they show why the market can look at the cocoa chart and think relief is already arriving while the benefit is still trapped inside a slower system of procurement, hedging, and pricing.

The first is hedging. Strauss discloses that during 2024 it built up losses on cocoa derivatives, and that the remaining NIS 49 million loss was realized in Q1 2025 through cost of goods sold. So even as market cocoa prices started to fall, FY2025 still carried the weight of older, more expensive protection.

The second is procurement lag. Strauss says explicitly that the effect of raw-material price changes on usage cost is gradual because of procurement processes and hedge policy. That is the transmission problem in its clearest form: value can be created in the commodity market well before it appears in reported earnings.

The third is competition and pricing power. The investor presentation says the decline in indulgence EBIT reflected pricing adjustments that were still insufficient to offset higher cocoa costs. In other words, even for a company with very strong brands, pass-through was incomplete.

So Strauss is clearly a cocoa-relevant name, but not one where investors should expect a one-to-one relationship between the cocoa chart and earnings. Transmission there is slower, layered, and shaped by hedging, promotions, and category management. The question is no longer whether relief exists at the commodity level, but how long it will remain trapped inside those layers.

Where Value Is Created, And Where It Gets Stuck

The real comparison between Carmit and Strauss is not only which one is more sensitive to cocoa. It is where along the transmission chain value is created, and where it can get stuck.

In practical terms:

• if cocoa stays lower, Carmit should feel it more directly
• but it is also more vulnerable to supplier terms, collateral, and working-capital pressure
• Strauss is less pure as a cocoa case, but if relief truly feeds through, it can produce a meaningful margin recovery in indulgence

What About Diplomat, Globrands, And The Rest

This is not an omission list. This is where discipline matters.

Diplomat does have a real connection to chocolate as a category. It reports a sweet food and snacks category that includes chocolate, biscuits, and wafers, and under its Mondelēz agreement it names brands such as Milka, Oreo, Toblerone, and Cote d'Or. Globrands also operates in confectionery and snacks, but its link is weaker: the FY2025 filing says that products in this segment are purchased from local suppliers, meaning Israeli manufacturers and or importers of global brands.

That is exactly why both stay outside the core thesis.

Part of the cocoa decline may eventually reach Diplomat and Globrands through supplier price lists, but FY2025 disclosure does not show the timing, the scale, or how much of that would remain with the distributor after commercial negotiations, promotions, and mix effects. This is not direct cocoa exposure. It is an indirect link through the supplier chain.

The same logic is even stronger for food retailers such as Shufersal, Rami Levy, Yochananof, and Tiv Taam. They sell chocolate, sometimes a lot of it, but they do not buy cocoa. Their question is not what cocoa did. Their question is what suppliers, private label, promotion intensity, and category competition did.

So this review is not missing dozens of names. It is separating:

• companies where cocoa is a real earnings driver
• from companies that sell chocolate, but where the commodity mostly sits somewhere else upstream

What 2026 Will Really Test

For Carmit, the test is whether lower cocoa finally lifts chocolate profitability rather than merely reducing pressure. Investors should watch:

• whether the chocolate segment gross margin rises meaningfully
• whether supplier terms begin to normalize
• whether CBE is a complementary tool or evidence that the old economics have still not fully returned

For Strauss, the test is different. Investors should watch:

• clear gross-margin recovery in indulgence
• the absence of fresh derivative overhang
• EBIT moving away from the weak FY2025 level
• evidence that the gap between selling-price updates and raw-material cost inflation is finally closing

The common denominator is this: for both companies, 2025 was still a transition year. At Carmit, the transition was from raw-material shock to attempted stabilization. At Strauss, it was from expensive cocoa toward first-stage relief that had still not fully reached earnings.

Bottom Line

The easiest mistake in this story is to build a basket that is too broad. That misses the real issue. The key question is not who sells confectionery, but where cocoa truly sits at the heart of cost of sales and how quickly the relief can reach reported numbers.

Investors looking for real cocoa exposure on the TASE ultimately arrive at two main names: Carmit and Strauss.

Carmit is the more direct, more concentrated, and more fragile case. Strauss is the larger and more complex case, where cocoa matters a great deal but passes through hedging, pricing, and competition before it reaches reported profit.

Around them are companies that sell chocolate, distribute chocolate, or report chocolate categories. But their FY2025 filings do not provide enough evidence that cocoa itself is the core driver. So anyone trying to understand who is truly exposed to cocoa on the TASE should stop thinking in terms of “who sells confectionery” and start thinking in terms of transmission: where does the commodity actually sit inside the economics of the business.