Improved granola and granola products containing chocolate and their methods of preparation are provided. The methods include adding chilled chocolate containing dextrose to granola ingredients prior to the addition of a sugar binder formulated to perform as required at about 29-32° C. (85-90° F.) or colder. The methods include baking granola containing chocolate, cooling and packaging granola products such as breakfast cereals and granola bars. By using chilled chocolate and the sugar binder formulated for this method the problems of chocolate separation, smearing and off-flavors can be avoided in granola products containing chocolate.