Hershey Co. will have to raise prices for its products and anticipates a hard time keeping shelves stocked with candy in advance of Valentine’s Day, company officials said at their financial forecast.
Like many marketers of comfort food, Hershey has experienced sales growth during the pandemic. Retail candy sales in 2020 were up more than 12% on average, and overall net sales grew 10.1%. Hershey is predicting sales to go up 8% to 10% in 2022.
But Hershey has been subject to the same supply chain pressures as most food processors, with labor problems and higher costs for ingredients and packaging. CEO Michele Buck said Hershey will institute “list price increases across all segments” on top of the increases it imposed last year.
"Historically, our category has successfully been able to execute price increases and we expect that to be the case this year as well," Buck said in remarks quoted by CNN.
Hershey had issues in supplying trade customers with Christmas candy, and it expects those problems to persist, Buck said: “We will continue to have pressure throughout the year. Under no circumstances will we be out of the woods entirely.”
The Wall Street Journal quoted retailers as saying they were ordering larger quantities of candy earlier in the year to try to get around supply difficulties.