Hershey says it is hiking chocolate prices

New York CNN Your Kit Kat bar and Reese s Peanut Butter Cups are officially getting pricier Hershey recounted its retail partners it is raising prices by a percentage in the lower double-digit range over what its chocolate products cost over the past couple years a company spokesperson authenticated to CNN The culprit high cocoa prices Bloomberg first broadcasted the increase Cocoa futures rose a whopping in after a increase in according to statistics from FactSet That s because Ghana and Ivory Coast account for almost of the world s cocoa production and the region has been hit by poor harvests due to weather exacerbated by environment change For example a survey led by Maximillian Kotz of the Barcelona Supercomputer Center discovered an early heat wave hit there was made degrees Celsius hotter due to conditions change Cocoa prices that April soared Cocoa futures are right now trading for per metric ton Although that s lower than the record high of per metric ton in December it s still significantly higher than it was two years ago Hershey noted in its comment that the price increase is not related to tariff or bargain policies In its earnings call in May Hershey stated it anticipated million to million in tariff costs in the second quarter of the year The price increase reflects the reality of rising ingredient costs including the unprecedented cost of cocoa For years we ve worked hard to absorb these costs and continue to make of our product portfolio available to consumers for under a company spokesperson declared In its earnings call in May the company stated it would also adjust its price pack architecture which basically means reducing the amount of product in a package more colloquially known as shrinkflation The benefit of this is it s not a direct price point increase but rather it s kind of a combination of sizing and price which can tend to offer perhaps a better value perception for consumers Michele Buck Hershey s CEO stated in an earnings call in May Swiss chocolatier Lindt explained in that it raised its prices and expected to continue into due to a challenging year characterized by record-high cocoa costs substantial price increases and weakened consumer sentiment