Hershey Issues Warning Amidst Record Cocoa Prices
Hershey, a major US chocolate company, issues a warning about profits and sales.
The cost of cocoa has surged to record levels, impacting the price of chocolate.
Dry weather in West Africa is affecting cocoa crops, leading to poor harvests and driving up prices.
West Africa produces the majority of the world’s cocoa supply.
Hershey predicts that cocoa prices will limit earnings growth this year.
The CEO of Hershey, Michele Buck, mentions that soaring costs may result in price hikes on products.
Hershey reported a 6.6% fall in sales in the fourth quarter due to consumer spending cutbacks.
To cope with the challenging situation, Hershey announces a two-year restructuring program.
The restructuring program aims to save $300 million annually and will impact less than 5% of Hershey’s 21,000 global workforce.
Profits and sales forecast by Hershey for this year fall below analyst expectations.
Cadbury owner Mondelēz also cites significant increases in cocoa and sugar costs as a major challenge this year.
A Cadbury UK spokesperson mentioned that they are increasing prices as a “last resort” to manage costs.
The price hike on Cadbury products follows a report from consumer watchdog Which? indicating a more than 50% rise in the price of popular festive chocolates from Christmas 2022 to 2023.
Overall inflation for UK supermarket food and drink dropped to 8.3%, but chocolate prices increased significantly by 15.3%.
The surge in cocoa prices affects cash-strapped consumers who will have to pay more for chocolate.
Hershey’s warning indicates potential price increases on its chocolate products.
Cadbury also increases prices, citing it as a “last resort” to manage rising costs.
Consumer watchdog Which? reports a more than 50% increase in the price of popular festive chocolates.
The overall inflation for UK supermarket food and drink is 8.3%, but chocolate prices experience a higher increase at 15.3%.
Hershey and Cadbury, major players in the chocolate industry, are grappling with the impact of soaring cocoa prices.
Hershey announces a two-year restructuring program to save costs and manage the challenging situation.
Mondelēz, the owner of Cadbury, identifies cocoa and sugar cost increases as significant challenges for the year.
The chocolate industry is using various tools, including pricing, to navigate the impact of rising cocoa prices.
The chocolate industry, particularly giants like Hershey and Cadbury, is facing a challenging situation with record-high cocoa prices.
Consumers are likely to feel the impact through potential price hikes on their favourite chocolate products.
The overall increase in chocolate prices outpaces inflation rates for other supermarket food and drink items.
The industry response involves strategic measures such as restructuring programs to save costs and mitigate the effects of soaring cocoa prices.