Double-Digit Price Hike Hits Popular Brands
Hershey confirmed it is raising prices across its candy portfolio, citing surging cocoa costs as the primary driver. The increase, described as a “low double-digit” hike, will impact iconic products such as KitKat, Reese’s, and Hershey Kisses. The company emphasized that the decision is not linked to tariffs or trade policies but is a direct response to the unprecedented rise in raw material prices.
The price adjustment will roll out over approximately 90 days, though the timeline may differ depending on the retailer. Hershey owns more than 90 brands and has built a global reputation for chocolate since its founding in 1894. This price action is part of the company’s strategy to preserve margins amid commodity volatility.
Climate Change and Underinvestment Fuel Cocoa Shortage
The global cocoa market is under severe pressure. Cocoa prices reached $8,402 per metric ton in June, representing a 73% increase compared to five years ago. The shortage is driven by extreme weather patterns in West Africa, home to the bulk of the world’s cocoa supply. Heatwaves, erratic rainfall, and plant diseases like Black pod rot have devastated crops in Ghana and the Ivory Coast.
According to J.P. Morgan Global Research, chronic underinvestment in cocoa farming has compounded the crisis. Farmers face limited incentives to replace diseased trees or modernize production methods. Tracey Allen, agricultural commodities strategist at J.P. Morgan, noted that growers receive only a fraction of the final value of cocoa, making sustainable reinvestment difficult.
Hershey Shifts Strategy to Manage Costs
In response to rising costs, Hershey plans to focus more on “less cocoa-intensive” products, aiming to balance its portfolio with new snack categories. During a recent earnings call, CEO Michele Buck outlined the company’s strategy to diversify into sweets, salty snacks, and “better-for-you” segments.
“We love our chocolate business and want to continue growing it,” Buck said, “but we also know expansion into adjacent snacking categories brings new consumers and usage occasions.” This shift supports Hershey’s broader vision of evolving into a diversified snacking powerhouse while maintaining its chocolate legacy.
Consumers Brace for Higher Candy Costs
Consumers should expect to see higher prices for their favorite treats in the coming months as retailers implement the increases. The move follows similar pricing adjustments across the food industry, where rising input costs—from cocoa to packaging—are forcing companies to rethink pricing strategies. Although inflation has eased in other sectors, commodity-based products like chocolate remain exposed to long-term climate and supply challenges.
With cocoa markets unlikely to stabilize in the short term, Hershey’s latest price hike may not be the last. The company’s balancing act between cost management and product innovation will be critical to sustaining growth in an increasingly volatile global market.