Hershey Records a Sweet 2023 but Warns of Layoffs in a Salty 2024

Feb. 9, 2024
The final quarter of 2023 foretold of volume and profit declines, and cocoa prices are hitting record highs.

Hershey’s full-year 2023 sales were up a handsome $1.2 billion, net income increased too, but volume and cocoa cost problems in the fourth quarter – and expected to last this year  – led the company to announce layoffs of approximately 5% of its workforce.

Full-year sales were $11.645 billion, up nearly 12%, and profits hit $1.862 billion, up 13%. But in the fourth quarter, consolidated net sales of $2.657 billion represented just a 0.2% increase, and organic sales volumes fell 6.6%. Net income of $349 million was a decrease of 11.5% over the previous year’s final quarter.

Separately the same day, Reuters reported global cocoa prices hit record highs on Feb. 8 as traders continued to scramble for supplies, predicting ever wider deficits this season and with concerns growing for the next. The culprit was weather damage to the cacao crop in West Africa.

"While historic cocoa prices are expected to limit earnings growth this year, we believe our strong marketing plans, innovation and brand investments will drive top-line growth,” said Michele Buck, Hershey president/CEO.

In a Securities and Exchange Commission filing, Hershey reported undertaking “a multi-year productivity initiative (‘Advancing Agility & Automation’) to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes and generate long-term savings.”

Much of it will be funded through layoffs, but “At the conclusion of the program in 2026, ongoing annual savings are expected to be approximately $300 million.”

Exactly how many layoffs, where and in what job titles were not reported.

Hershey was Food Processing's 2022 Processor of the Year.

About the Author

Dave Fusaro | Editor in Chief

Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.