Hershey’s Price Hike Explained – Newsweek

The Hershey Company plans on raising its prices to cope with the “unprecedented” costs of cocoa.

The company, known for Reese’s Peanut Butter Cup as well as its signature milk chocolate and Hershey’s Kisses, confirmed the change to various media outlets this week. Hershey said that persistently high cocoa prices had forced it to raise prices by a “lower double-digit” percentage.

Newsweek has contacted the company via its website outside of regular business hours for comment.

Why It Matters

Hershey is one of the largest chocolate companies in the U.S. by both market share and sales, which reached over $11.2 billion last year.

But global cocoa prices have rocketed in recent years due to a worldwide supply shortage stemming from a combination of factors including weather conditions and disease outbreaks in West Africa, where much of the world’s cocoa is grown. Cocoa prices on the New York commodities market are three times as high as they were in 2022.

The company has not confirmed the exact price increases it will be putting in place, nor which specific products will be affected, but the change will likely effect many of the chocolate bars that Americans purchase most frequently.

What To Know

Hershey said it informed its retail customers last week that it would be making the change.

The company previously announced pricing actions last August, after outgoing CEO Michele Buck said the high costs of cocoa would significantly hurt the company’s bottom line.

This was prior to another surge in cocoa prices later in 2024. According to data from TradingView, cocoa futures rose nearly 170 percent over the year, peaking at more than $12,000 in mid-December.

Cocoa futures and prices have adjusted, the latter currently trading at around $8,100 per metric ton, though these still remain more than double the levels of just two years ago.

In its 2024 annual report, released in February, Hershey predicted that high cocoa prices would “put significant pressure on 2025 earnings.”

Hershey told news outlets this week that the price increases were “not related to tariffs or trade policies,” but rather reflected “the reality of rising ingredient costs including the unprecedented cost of cocoa.”

In an earnings call in May, Hershey said it anticipated between $15 million and $20 million in “tariff expenses” in the second quarter of this year.

What People Are Saying

A spokesperson for Hershey told CNN the price hike “reflects the reality of rising ingredient costs including the unprecedented cost of cocoa.”

“We’ve worked hard to absorb these costs and continue to make 75% of our product portfolio available to consumers for under $4.00,” they added.

What Happens Next?

Hershey has not specified when the price increases will come into effect.

During the May earnings call, Hershey’s CEO said cocoa production was expected to rebound in the year. “There are reasons to believe that this year’s crop marks the beginning of a multi-year growth cycle in cocoa supply,” said Buck. She is set to retire in August, to be succeeded by Wendy’s CEO Kirk Tanner.