Cocoa crisis: Hershey and other candy giants hike prices
If you’ve got a sweet tooth, prepare to pay more. Hershey says it’s hiking prices by double-digits – and other chocolate makers are following suit – as cocoa costs soar to historic highs.
What’s driving the price surge?
The Pennsylvania-based candy giant, which owns nearly 100 brands including Hershey chocolate bars, Reese’s, KitKat and York Peppermint Patties, says it’s facing unprecedented costs for raw cocoa.
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Chocolate suppliers get roughly 70% of their cocoa beans from West African countries such as Ghana and the Ivory Coast.
During the week of July 21, cocoa futures topped $8,000 per metric ton, according to The Wall Street Journal. That’s up more than 70% from five years ago. Most cocoa comes from Ghana and the Ivory Coast, where extreme weather, heavy rain and Black Pod Rot, a crop-killing plant disease, have devastated yields.
Not tariff related, says Hershey
A Hershey’s spokesperson told CBS News the price increase is not linked to tariffs or trade policy, but purely to ingredient costs.
“It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa,“ the spokesperson said.
Chocolate accounts for roughly two-thirds of Hershey’s business, while non-chocolate candy makes up just 12%.
Last year, CEO Michele Buck warned that inflation was squeezing margins and that rising costs would be passed on to customers. She also hinted at diversifying into “white spaces” like salty snacks and better-for-you treats to broaden the company’s appeal.
More price hikes ahead?
To cushion the blow, Hershey has locked in future cocoa purchases at fixed prices through long-term contracts, but elevated prices are expected to remain for the foreseeable future.
It’s not just Hershey. Swiss chocolate maker Lindt & Spruengli and Mondelez, the parent company of Cadbury and Oreo, have also raised prices – citing the same cocoa crunch.
Industry analysts say the supply issues in West Africa aren’t going away anytime soon, which means your favorite chocolate fix could keep getting more expensive.
Ella Rae Greene, Editor In Chief
