Hershey raising candy prices by double digits on high cocoa costs
Hershey raising candy prices by double digits on high cocoa costs
By Kristina Peterson, Bloomberg News
Hershey Co. is raising prices on its candy due to historically high cocoa costs.
The Pennsylvania-based maker of Hershey’s chocolates and Reese’s Peanut Butter Cups told its retailers last week that it would be implementing a roughly double-digit price increase, company officials said Tuesday. That increase reflects a higher list price as well as adjustments to the weight and number of candies in a bag, a practice known as shrinkflation.
“This change is not related to tariffs or trade policies,” Andrew Archambault, president of US confection at Hershey, said in a statement. “It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa.”
The company previously announced a price increase a year ago.
The price of cocoa has surged in the last two years, due to supply shortages in the wake of disease and poor weather in Ivory Coast and Ghana, which usually account for more than 60% of global supplies. Cocoa futures have more than doubled and touched a record in December, upending the chocolate industry.
Cocoa futures prices have since cooled as global production improves and demand slumps, but costs remain high above historical levels.
Swiss chocolatier Lindt & Spruengli AG pushed through a 15.8% price increase in the first half of the year and its chief executive said he expects cocoa inflation to continue into next year.
Other food companies, including Conagra Brands Inc., have said tariffs have raised their supply costs, including for tinplate steel and aluminum.
Hershey said in May that it anticipated $15 million to $20 million of tariff costs in the second quarter. The candy maker has asked the US government for a tariff exemption on cocoa and is still hopeful it may receive one, company officials said Tuesday.
With assistance from Ilena Peng.
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