%HersheyCo (NYSE: $HSY) has told retailers that it plans a double-digit price increase on its %Chocolate bars and other candies due to a surge in its %Cocoa input costs.
The maker of Reese’s Peanut Butter Cups and Hershey Kisses has confirmed the price increase and said it is necessary as the company struggles with elevated cocoa costs.
“This change is not related to tariffs or trade policies. It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa,” said Hershey in a written statement.
Cocoa prices have risen sharply in the last two years and hit record levels due to supply problems in Ghana and the Ivory Coast, the two main growing regions in the world.
Drought conditions and disease have wiped out vast swaths of the global cocoa crop in recent years, pushing prices for the main ingredient in chocolate to record highs.
While cocoa prices have come down in recent months, they remain above historic levels and continue to be elevated at $8,180 U.S. per tonne.
During Hershey’s quarterly earnings call in May, management said the company was working to absorb high input costs by adjusting pricing.
Hershey has warned that consumers should expect higher prices in the second and third quarters of this year.
HSY stock has gained 8% this year to trade at $181.69 U.S. per share.
