First coffee, now chocolate. It looks like more of the little indulgences that get us through the day keep getting more expensive. That includes Hershey chocolate treats.
CBS News reported this week that the iconic Pennsylvania-based candy company confirmed that it plans to raise its prices due to rising cocoa costs. In a statement provided to the outlet, Hershey said that the increase is not related to tariffs or trade policies – Audacy reported last week that new tariffs could drive up the price of coffee.
“It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa,” said a company spokesperson.
The Wall Street Journal reported this month that “last year’s record-high prices for cocoa have translated into lower demand for chocolate this year.” This Tuesday, that outlet also reported that another candy company, Switzerland-based Lindt, had an “earnings miss” amid high cocoa prices.
According to CBS’ report, the “low double-digit increase” from Hershey could impact the 131-year-old company’s many brands, including Hershey Kisses, KitKat bars, Reese’s peanut butter cups and York peppermint patties.
After the closing bell Tuesday, Hershey share prices were up 2.8%.
Rising cocoa prices, along with impact of severe weather and climate change, have been concerns for the chocolate industry for years. Data from the St. Louis Federal Reserve Bank shows that prices spiked from $2,220 per metric ton in October 2022 to $9,865 in April 2024. Currently, they are still high at around $8,401.
Last September, Audacy reported on the pressure of severe weather and climate change in areas where cocoa is grown, particularly the West African cocoa belt, where 70% of the world’s chocolate comes from. There, rising temperatures have been changing humidity and rainfall patterns. The following month, we reported that Halloween chocolate was expected to become more expensive due to high cocoa prices.
In April, Mark Taylor, senior director of strategic sourcing at Hershey, wrote in a blog post that: “In my years in this industry, I’ve never witnessed a cocoa market quite like the one we're experiencing today.”
While he said that headlines about cocoa supply shortages and sky-high prices have been “greatly exaggerated,” he also said that the “volatility, price swings, and market dynamics we’re seeing are truly unprecedented.”
Taylor went on to say that the current cocoa market is “not healthy” and that, beyond weather conditions and crop disease, something else is at play. In fact, he said that production in Côte d'Ivoire and Ghana was up from last year’s challenges as of April, with arrivals currently up 20% and that cocoa production from other regions was also growing. That’s why Taylor said Hershey was concerned about dysfunction in the cocoa exchanges due to a lack of liquidity.
“While high cocoa prices impact our operations and require extreme agility, Hershey remains committed to building a resilient cocoa supply chain,” Taylor said.
CBS noted that Michele Buck, president of The Hershey Company, said during a May earnings call that the company planned to lean into products that are “less cocoa intensive” due to the cocoa challenges. Going light on chocolate has proven successful for other companies during times when cocoa was hard to come by – Audacy recently reported on the rise of Italian company Ferrero and its Nutella brand, which was created during a World War II chocolate shortage.
“We love our chocolate business and we want to continue to grow that,” Buck said. “But we also know that if we get into white spaces like sweets, better-for-you and salty, it adds incremental consumers and occasions,” Buck added.