The American giant chocolate and candy manufacturer Hershey’s has announced that it will raise the prices of its products across the board due to the high cost of raw material cocoa.
According to a report by The Wall Street Journal on Tuesday, a senior executive at Hershey’s stated that price increases will generally fall between 10% to 20%. Last February, Hershey’s CEO Michele Buck told CNBC that the company had already developed hedging strategies to deal with price fluctuations.
Meanwhile, Swiss chocolate maker Lindt & Sprüngli has also raised product prices to offset the rise in cocoa costs.
In addition, the American multinational confectionery, food, and beverage company Mondelez International, which owns Oreo and Cadbury, announced earlier this year that it expects to raise chocolate prices due to the increasing cocoa costs.
As profits shrink and sales slow down, chocolate manufacturers have started reducing production volumes, leading consumers to turn to alternatives such as gummies, licorice, and flavored cream candies.
Approximately 70% of the global cocoa supply comes from West Africa, where harsh weather, plant diseases, aging tree stocks, and destructive small-scale mining activities have severely affected cocoa production.
Cocoa prices have surged since September 2023, with costs more than doubling that year. Cocoa futures prices for delivery in May 2024 hit a historic high of $10,080 per metric ton on March 26, eventually closing at $9,622. By December, prices exceeded $12,000 per metric ton.
Although prices have dropped to around $8,100 per metric ton this week, they still remain above historic levels.
Despite some improvement in weather conditions, industry insiders told Reuters earlier this month that cocoa production in West Africa could decrease by another 10% from 2025 to 2026.