The company Hershey confirmed the media reports on Tuesday that it increases candy prices as it fights Cocoa cost increase.
The price change will be a “two-digit increase” and will affect the products through the company’s confectionery portfolio, according to a Hershey spokesperson. Founded in 1894, the company based in Pennsylvania has more than 90 marks Including Hershey Kisses, Kitkat, Reese’s and York.
“This change is not linked to prices or trade policies,” the spokesman said in a statement to CBS News. “This reflects the reality of Increase in ingredient costs Including the unprecedented cost of cocoa. “”
Price increases generally take approximately 90 days to take effect, although the delay varies according to the retailer, added the spokesperson.
Global cocoa shortage
Cocoa prices have skyrocketed in recent years due to a global cocoa shortage. The cost of the product was $ 8,402 in June, an increase of 73% compared to five years ago, according to to data from the Federal Reserve Bank of St. Louis, which follows the prices of foodstuffs.
THE majority of the world cocoa supply Comes from Ghana and Côte d’Ivoire, which faced heat waves and heavy rain linked to climate change. These unfavorable weather conditions have led to diseases like black rot, which kills cocoa crops. Chronic underinvestment in cocoa farms is another reason behind the point of cocoa prices, according to to an article by JP Morgan Global Research.
“Cocoa is a market where the producer produces a very high value but receives a very low part of the real value chain.
In a profile call in May, Michele Buck, president of the company Hershey, said that the candy company would look at products that are “less intensive in cocoa” while it sails on the inflation of cocoa prices. This is part of the business vision to become a “snacking power,” said Buck.
“We love our chocolate company and we want to continue to develop this,” said Buck. “But we also know that if we are entering white spaces like candies, better for you and salty, it adds consumers and incremental occasions,” she added.
The Hershey equity price increased by 2.8% after the closing bell on Tuesday.
