Hershey plans to raise chocolate prices: ‘Reflects the reality of rising ingredient costs'
The Hershey Company has confirmed it plans to raise prices across its portfolio, blaming the increase on the rising costs of ingredients — particularly cocoa.
'We're committed to delivering the treats consumers love while continuing to invest in making our products and experiences even better,' a Hershey spokesperson said in a statement obtained by Nexstar. 'To support our approach, we're making a price adjustment with our retail customers. This change is not related to tariffs or trade policies. It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa.'
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The Hershey Company, whose brands include Reese's, Almond Joy and Kit Kat, among others, has 'worked hard to absorb these costs' and keep most of its offerings under $4 for years, according to a spokesperson.
Price changes are expected to go into effect later this fall, with the average increase to be in the low double-digit percentages, the Associated Press reported, citing Hershey. In some cases, the size of the packs will simply become smaller, according to the AP.
Cocoa prices have more than doubled over the past two years due to poor weather and disease in West Africa, which supplies more than 70 percent of the world's cocoa.
Cocoa futures, which are binding contracts for a specific quantity of cocoa, stood at $7,380 per metric ton on Wednesday, according to the International Cocoa Organization, which releases a daily average of prices in London and New York.
That's down from December's peak of $11,984, but it's still 121 percent higher than two years ago.
And the situation remains volatile. According to the International Cocoa Organization, prices surged in early June on concerns about production in Ivory Coast but eased on optimistic forecasts for production in Ghana and Latin America. They rose again in late June after heavy rains in West Africa, which could worsen the outbreak of diseases that harm crops.
It's no surprise, then, that Hershey isn't the only candy company raising prices.
On Tuesday, Swiss chocolatier Lindt said it raised prices by 15.8 percent in the first half of this year. The company said it was able to offset some of the higher cost of cocoa with long-term contracts but had to pass much of it on to consumers.
Cloetta, a Swedish confectionary company, told investors last week that it raised chocolate prices in the second quarter. And Nestle raised U.S. prices for products like Toll House chocolate chips in the spring.
Earlier this month, nine members of Pennsylvania's Republican Congressional delegation also sent a letter to the Office of the United States Trade Representative requesting an end to tariffs on unfinished cocoa and chocolate imports.
The lawmakers cited the growing cost of cocoa products, and the lack of a domestic alternative. Cocoa trees cannot grow in the United States.
'These imported products fuel a thriving domestic chocolate manufacturing industry that employs tens of thousands of Americans across this country, many of them in Pennsylvania,' the lawmakers said in the letter.
Hershey, however, has stressed that the price increases of its candies won't apply to products specially packaged for Halloween. A representative for Hershey was not immediately available to comment further on Halloween pricing.
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