Latest news with #Hershey
The Hill
8 hours ago
- Business
- The Hill
Hershey plans to raise chocolate prices: ‘Reflects the reality of rising ingredient costs'
HERSHEY, Pa. (WHTM) — Some products on the candy aisle are about to get a bit more expensive. 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.' Is a hot dog a sandwich? The Hot Dog Council has a very strong opinion 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.
The Independent
8 hours ago
- Business
- The Independent
Hershey raising the price of candy bars due to cocoa shortage
Your favorite chocolate bar will soon come with a bigger price tag after Hershey announced it was raising the price of its candy over the high cost of cocoa. Hershey is expected to raise its prices for retail customers by double digits. Prices will generally increase between the low teens and 20 percent, The Wall Street Journal reported Tuesday, citing a company official. But the WSJ reports three-quarters of the candy maker's products should continue to cost $4 or less. Hershey executives have said demand for its products has remained strong, per the WSJ. The company has yet to see its full profits for the summer, when consumers are inclined to grab a pack of Hershey's bars for S'mores by the fire. High cocoa costs are to blame for the price increases at Hershey and other treat companies. Last December, cocoa prices hit over $12,000 per metric ton, according to the WSJ. While costs have fallen to about $8,100 per metric ton this week, they still exceed historic levels. West Africa, which accounts for about 70 percent of the world's cocoa supply, has been hit with poor weather, plant disease, aging tree stocks and destructive small-scale gold mining. While weather conditions have slightly improved, industry sources told Reuters earlier this month West Africa will likely see another 10 percent decline in cocoa output in the 2025 to 2026 season. The WSJ reported in another recent article Swiss chocolatier Lindt & Spruengli had attempted to pass rising cocoa costs onto consumers through price hikes, but even that wasn't enough to make up for the higher cocoa costs.
Time of India
10 hours ago
- Business
- Time of India
Hershey to raise chocolate prices as cocoa costs remain high
Hershey has told retailers it will be taking a double-digit price increase on average across its confection portfolio due to a surge in costs of cocoa, a company spokesperson said on Tuesday. The maker of Reese's Peanut Butter Cups declined to comment on the specifics of the pricing action as discussions with its retail partners are underway. "This change is not related to tariffs or trade policies . It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa," the spokesperson said. Cocoa prices have risen sharply in the last two years and touched a record in December due to supply problems in Ghana and the Ivory Coast. Since then, the price of cocoa has fallen to an eight-month low, though it remains above levels seen earlier in the decade. During Hershey's quarterly earnings call in May, CEO Michele Buck said the company was working to absorb high input costs by adjusting the pack size and pricing together, especially on seasonal items. These actions would lead to higher prices in the second and third quarter, she had said.
Chicago Tribune
12 hours ago
- Business
- Chicago Tribune
Hershey and other chocolate makers hike prices as cocoa remains near record highs
Here's the good news: The Hershey Co. says it's not raising prices for Halloween candy this year. But here's the bad news: Hershey and other chocolate makers are continuing to hike prices, saying a volatile cocoa market gives them no choice. Hershey, the maker of Reese's, Whoppers, barkThins and other chocolate candies, said Wednesday that it will be raising U.S. retail prices later this fall. In some cases, pack sizes will get smaller; in others, list prices will rise. The average price increase will be in the low double-digit percentages. 'This change is not related to tariffs or trade policies. It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa,' Hershey said in a statement. Hershey stressed that the price increases won't apply to products specially packaged for Halloween. On Tuesday, Swiss chocolatier Lindt said it raised prices by 15.8% 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. 'The development of the global chocolate market in the first half of 2025 was a continuation of what we saw in 2024, with cocoa prices remaining close to record highs,' said Adalbert Lechner, Lindt's CEO, in a conference call with investors. 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. 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% 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% 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 almost a bit dangerous to comment on this because it's changing so fast,' Cloetta Chief Financial Officer Frans Ryden said last week in a conference call with investors. 'This is something that's moving hugely up and down all the time.' Meanwhile, prices have been rising on store shelves. The average unit price of a chocolate bar in the U.S. in July 2021 was $2.43, according to Nielsen IQ, a market research company. As of last week, it was $3.45, a 41% increase. That's hurting customer demand. Nielsen said unit sales of chocolate fell 1.2% in the year ending July 12. Tariffs could also impact U.S. prices. President Donald Trump threatened a 21% tariff on cocoa and other products from Ivory Coast in April, for example, but then paused the tariffs' implementation. The National Confectioners Association is asking the Trump administration to protect cocoa from tariffs. The group says the U.S. imports nearly $4.4 billion in chocolate, cocoa and candies each year, and the association's members export nearly $2 billion in American-made chocolates and candy annually.
Fast Company
12 hours ago
- Business
- Fast Company
Your favorite candy just got pricier, and it's not because of tariffs
If you're planning to roast s'mores over a campfire this summer, you'll be spending more than last year on one ingredient you can't skip. Hershey plans to raise prices on its products to offset the cost of cocoa, a commodity that's been on a pricing rollercoaster of its own in the last two years. CBS News reports that the company will introduce a 'low double-digit increase' in prices across its products. Hershey owns many of the most popular candy brands in the U.S., including Reese's, Kit Kat and York, as well as non-chocolate candies like Twizzlers and Jolly Rancher. The price hike will likely go into effect within 90 days, though that timeline may vary. Last year, the price of cocoa hit historical highs, soaring past $10,000 per metric ton. Cocoa prices began spiking at the beginning of 2024, doubling over the course of the year and tripling when looking back to late 2023. Over the last month, cocoa dipped well below its record highs, but still costs more than twice what it did two years ago. Cocoa powder, used to make chocolate, comes from the seeds of the cacao tree, a water-intensive plant grown in tropical parts of Africa and South America. West Africa accounts for three quarters of the world's cocoa supply, with the Ivory Coast and Ghana being the world's top two cocoa-exporting nations. With the global appetite for chocolate relying on a single region in Africa, cocoa is relatively vulnerable to forces outside of farmers' control – particularly climate-caused weather events worsening as the planet warms. The climate crisis is expected to cause accelerating agricultural losses for staple crops like corn and wheat around the globe, and cocoa is no different. Excessive rainfall in late 2023 caused cacao pods to rot, one factor that sent the price of the commodity sky-high. Intense heat is also taking its toll on cocoa farming and cacao trees can struggle to produce pods when temperatures stretch above the plant's ideal range for days on end. Less production means higher prices, though those effects might not have been fully felt by consumers right away. 'Pricing has yet to pick up meaningfully, but we expect this to accelerate potentially to the low-teens in 2025,' said Celine Pannuti, J.P. Morgan's Head of European Staples & Beverages said in a late 2024 report on the cocoa crunch. 'We see the chocolate market set for inflation largely unprecedented in recent history.' Chocolate in a changing economy Hershey says that its planned price increase isn't related to tariffs, but the company has identified tariffs as a threat to its business before. Cocoa can't be grown in the U.S., and must be imported, making it vulnerable not only to a changing climate, but to the whims of a president keen to inject chaos into global trade. In May, Hershey was pursuing an exemption with the Trump administration that would allow the company to import its key ingredient without taking on new costs associated with tariffs. In an earnings call, the company estimated that Trump's tariffs would cost it between $15 and $20 million in the second quarter of the year. 'Absent tariff relief, this expense is expected to increase in the third quarter as we work through inventory on hand,' Hershey CFO Steve Voskuil said on the call. Given that Hershey's prices will increase, the company likely did not secure an exemption for its cocoa imports – particularly since any conversation with Trump would likely come with threats against raising prices. Fast Company has reached out to Hershey for an update on its pursuit of a tariff exemption for its cocoa imports. 'As a largely domestic food producer, we are relatively less exposed to tariffs than other Industries,' Hershey CEO Michele Buck said in May. 'That said, the current U.S. levy on cocoa is an exposure that we must manage on top of the cocoa market's unprecedented recent price swings.' Cocoa might be more expensive now, but Hershey is optimistic about the future, noting in its last earnings call that cocoa supplies from the world's top three suppliers should be up by 20%. The spike in cocoa prices also led to a flurry of cocoa farming investment, a move that could improve yields in the future. 'There are reasons to believe that this year's crop marks the beginning of a multi-year growth cycle in cocoa supply,' Buck said. 'In the meantime, global end users are now responding to persistently high prices in earnest, having waited and watched for some time.'
