Cocoa Prices Soar, Hershey and Mondelez Raise Chocolate Prices Again

Cocoa prices have roughly doubled over the past year, leading to a series of record highs recently due to diminishing supplies. As a result, chocolate manufacturers like Hershey and Mondelez, the maker of Cadbury chocolates, are planning additional price increases. These hikes are in response to the surge in cocoa prices and inflationary pressures. 

Hershey's sales volumes decreased by 6.6 percent in the quarter ending December 31, 2023. The company, facing a downward trend in demand, has implemented job cuts to control costs and introduced new products like Reese’s Caramel Big Cup. Hershey's latest price increase took effect in February 2024. Mondelez also announced plans for price hikes during an earnings call on January 30, 2024. In 2023, Mondelez's chocolate prices in Europe, its largest market, rose by 12 to 15 percent.

Swiss truffle-maker Lindt & Sprungli is addressing rising cocoa costs by enhancing efficiency and through a forward-looking purchasing strategy. A portion of these increased costs is being passed on to consumers through price increases. Market research firm Circana indicated that consumers might become more selective in purchasing chocolate due to these price hikes, with no immediate expectation of a decrease in prices. Chocolate candy confections, previously insulated from inflation, now face a test of affordability.