Hershey Foretells Chocolate Price Increase; Other Confectioners More Discreet

As it deals with rising cocoa costs, Hershey Co. reported last week it will be raising U.S. retail prices of its chocolate candies this fall, apparently in the low double-digit percentages. In some cases, pack sizes will get smaller; in others, list prices will rise.

Hershey is not alone. Also last week, Swiss chocolatier Lindt acknowledged it already has increased prices by 15.8% in the first half of this year. Nestle’s financial reports have included references to price hikes. Mondelez has been quietly working them in.

“We're committed to delivering the treats consumers love while continuing to invest in making our products and experiences even better,” a Hershey spokesperson told us. “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.”

The cost of cocoa has been on a steady rise since late 2023. Cocoa futures rose to $8,575 per tonne today (July 28), “driven by ongoing supply issues despite recent improvements,” said Trading Economics. “Over the past two years, prices have more than doubled due to poor weather and disease in Ivory Coast and Ghana, which supply over 60% of global cocoa.”

While the current price is down from the $12,218 recorded on April 15, 2024, it’s still four times the average price for the previous four years.

In its half-year report, Nestle said pricing contributed 2.7 percentage points of its 2.9% organic growth in the first six months of this year. The company acknowledged it is highly invested in two of the most volatile commodities right now.

“Confectionery and coffee were the largest organic growth contributors, driven by pricing of 10.6% and 6.0%, respectively,” the Nestle report said. “Our focus in these two categories is on smart pricing action to fully address input cost increases where possible, while maintaining medium-term consumer penetration.”

At that midyear point, Nestle reported that the 8.5% organic growth in its confectionery category “was pricing driven… [real internal growth] was negative, reflecting some short-term elasticity response to the price increases.”

In Mondelez’s first quarter report, while pricing offset volume/mix decreases in every other geography, it was not enough to counter the volume decrease in North America, where revenues fell 4.1%. Company-wide sales for the first quarter inched up 0.2%.