Chocolate lovers, you’re going to have to shell out a little more cash to satisfy your sweet tooth. Hershey Co. is expecting its first price hike in three years. The chocolate giant says the price increase could chew up short term sales, but chocolate’s popularity will prevail over the long haul.
The rising costs of cocoa and dairy are at the heart of the chocolate price increase that Hershey announced July 15. The 120-year-old maker of Hershey Kisses and Reese’s Peanut Butter Cups will pay particular attention to any decrease in sales caused by the price hike.
This is a critical moment for candy makers, because even some of the world’s best chocolate brands are fighting for U.S. consumers in a shrinking market.
[Image: digitalreflections / Shutterstock.com]
Nestle candy bars will also cost more.
One of Hershey’s biggest competitors Mars Chocolate North America said on Wednesday it was raising prices 7 percent. Just three months ago, The world’s biggest confectioner, Swiss-based Nestle SA, warned of price changes only three months ago.
The Washington Post reports cocoa prices are just one of several factors that dictate the price chocolate lovers pay to satisfy a craving—sugar, milk, packaging, processing, and shipping costs all contribute, too. Chocolate makers reasonably expect these commodities and factors to fluctuate, because they tend to be fairly volatile. Everything from poor weather to pests, and even political turmoil in major cocoa producing countries, can affect its price.
As for Hershey Co., the price increase goes into effect immediately.