Hershey Issues Alert Regarding Unprecedented Cocoa Price Surge

Hershey warns of pricey chocolates ahead as cocoa costs soar, urging sweet-toothed fans to brace for impact on their wallets.

By Aatar Ata | Founder and Senior Author of Aatar X

4 min read — February 09, 2024

The folks over at Hershey, the big chocolate player in the US, just gave everyone a heads up about their profits and sales. Why? Well, turns out the cost of cocoa has shot up like crazy, hitting record levels. And guess who feels it? Yep, chocolate lovers and their wallets.

Cocoa prices globally hit a whopping $5,874 (£4,655) per ton in New York last Thursday. Why? Blame it on the dry weather messing with crops in West Africa, the main source of global cocoa. Poor harvests there mean prices are skyrocketing.

In London, cocoa prices jumped by 7.3%, hitting a record £4,660 per ton. That’s more than double the £2,023 per ton from just a year ago.

Now, Hershey, the genius behind treats like Reese’s Peanut Butter Cups, is telling us to brace for impact. They’re saying these crazy cocoa prices will probably cramp their style in making money this year. Michele Buck, Hershey’s big boss, spilled the cocoa beans, admitting a 6.6% drop in sales last quarter because people are holding back on spending. And get this, she hinted that our beloved chocolate treats might get pricier.

In her words, “Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage our business.” Translation: they might have to charge us more.

To deal with this mess, Hershey spilled the cocoa, announcing a two-year plan to restructure things. They’re aiming to save a cool $300 million each year, but don’t worry, they say it’ll only affect less than 5% of their 21,000 global workforce.

But Hershey isn’t alone in this chocolate crisis. Cadbury’s parent company, Mondelēz, already said they’re in for a bumpy ride this year with cocoa and sugar costs soaring.

Hi Rowena, making changes to the price of our products is always a last resort, however, costs across our supply chain have risen steeply. Core ingredients we heavily rely on, like cocoa and sugar are a lot more expensive, while the cost (cont) https://t.co/6rlnKWZqNE
— Cadbury UK (@CadburyUK) January 19, 2024

And remember that report from consumer watchdog Which?? It found out that the prices of our favorite holiday chocolates jumped by more than 50% from 2022 to 2023. Ouch.

While overall food and drink prices in UK supermarkets eased to an 8.3% increase, chocolate took the crown with a whopping 15.3% surge. So, brace yourselves, chocolate lovers, the industry’s dealing with some serious challenges, and we might have to dig a bit deeper into our pockets for our sweet tooth cravings.

Aatar Ata

Founder & Author at Aatar X

I'm Aatar Founder and Senior Author of Aatar X with 6 years of writing experience. I have also completed 150+ projects of writing on Upwork. If you have any questions contact me at aatarata1@gmail.com