Chocolate prices surge as Hershey, Cadbury report higher profits
FILE-Chocolate Easter bunnies and other animals lie on a table prior to being packaged at a production facility. (Photo by Sean Gallup/Getty Images)
Consumers shopping for candy for Easter may be paying for their sweet treats at the grocery store, with the cost of chocolate soaring.
This is related to the price of cocoa limbs rising this year, doubling since the start of 2024. Factors related to the higher cost of chocolate are linked to higher temperatures and weather conditions affecting damaged crops in West Africa, where over 70% of the global cocoa supply is manufactured.
Additionally, sugar prices have increased as futures for a pound of sugar jumped 8% this year after rising 2.7% in 2023, the Associated Press reported.
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Despite the skyrocketing costs of these goods, major chocolate companies like Hershey’s and Cadbury maker Mondelez have benefitted by passing those costs on to shoppers.
Hersey’s net profits leaped to 16.7% in 2023 from 15.8% in 2022, while Mondelez reported a spike in its profits to 13.8% in 2023 compared to 8.6% in 2022.
But the candymakers reported declining sales in recent fiscal quarters as shoppers became fed up with paying higher prices for chocolate.
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Hershey increased its prices for chocolate in 2023 as inflation mounted, as the company shared with the AP that it raised prices on some grocery and food service items early in 2024 as they expect sales to grow roughly 3% this year.
The Pennsylvania-based organization told the AP that it plans to raise prices to cover inflation.
Separately, Mondelez has relied on price surges to counter mounting cocoa costs. According to the AP, Mondelez said it has a 13% share in the global chocolate market, acknowledging price hikes of up to 15% for its chocolate products in 2023, with high prices playing a role in the company meeting projected revenue growth of up to 5% in 2024.
Citing the federal government’s recent report on consumer prices, the AP noted that the cost for candy and other sweets soared 5.8% in February compared to 2023, with price spikes in that range since last year.
The Associated Press contributed to this report. This story was reported from Washington, D.C.