Hershey, the chocolate manufacturing company, has told retailers that it will be hiking up its prices to the double digits on average across all its products, according to a spokesperson for the company.
They revealed it on Tuesday
A spokesperson for the confectionary company revealed the planned price hike on Tuesday, July 22, as reported by Reuters.
But they declined to comment on the specifics of the pricing action as discussions with retailers are still taking place.
It’s not because of tariffs
The company, which makes the popular Reese’s Peanut Butter Cups treat, explained that the rise in prices is not because of trade tariffs, but rather because of the increasing price of cocoa beans.
The spokesperson clarified it
“This change is not related to tariffs or trade policies. It reflects the reality of rising ingredient costs including the unprecedented cost of cocoa,” the spokesperson for Hershey said.
There have been supply problems with cocoa
The prices of cocoa have risen sharply in the last two years, as per Reuters, reaching a record high price in December of last year.
This comes due to supply problems in Ghana and the Ivory Coast, where the bean is majorly sourced.
Adverse weather conditions are affecting it
Prices of cocoa are already affected due to weather changes and plant diseases hurting harvests in recent years.
Ivory Coast, the West African nation responsible for almost half of the world’s cocoa supply, has been getting insufficient and irregular rainfall, which is affecting the plant’s production.
The plan is to absorb these costs
The company plans on absorbing these high input costs by adjusting the pack size and pricing together, per Hershey CEO Michele Buck, who revealed this would happen especially to seasonal items in a quarterly earnings call in May.
This would increase the prices
These actions would naturally cause an increase in the prices of Hershey products in the second and third quarter, Buck said.
