Hershey Co. to Raise Chocolate Prices by 20% Amid Sector-Wide Cost Surge

Hershey Co. has announced impending price increases across its chocolate products, with retail prices set to rise by up to 20% due to persistent surges in cocoa costs. The adjustments, now communicated to retailers, mark the latest in a broader industry trend as companies grapple with elevated input prices. The move follows similar actions by competitors such as Lindt & Spruengli and Mondelez, the maker of Oreo, reflecting a sector-wide response to the prolonged inflationary pressure in cocoa markets [1].

The price hikes will affect approximately 75% of Hershey’s candy portfolio, though the company emphasized that most items will remain priced at $4 or less. This strategy aims to balance affordability with the need to offset rising production costs. Cocoa prices, while having retreated from a peak of $12,000 per metric ton at year-end 2024, remain significantly above historical averages at around $8,100 per metric ton. Analysts note that the cost of cocoa has stayed elevated due to supply chain disruptions and climate-related challenges, with no immediate signs of stabilization [1].

In parallel, scientific efforts to reduce chocolate production costs are gaining traction. Researchers at Switzerland’s Federal Institute of Technology have developed a method to utilize the entire cocoa fruit—rather than just the beans—for chocolate production. This innovation could reduce waste and lower dependency on traditional cocoa bean sourcing, as current processes discard most of the fruit. The technology also eliminates the need for added sugar, potentially addressing growing consumer demand for healthier options [1].

Regulatory pressures are further complicating the chocolate industry’s cost structure. New European Union rules, effective next year, will require deforestation-free certification for cocoa imports. Compliance with these standards, alongside existing environmental and labor accountability measures, is expected to add to operational costs for producers. While Hershey did not specify how these regulations might impact its pricing strategy, industry observers suggest such requirements could accelerate consolidation among smaller players unable to absorb compliance expenses [1].

The price adjustments underscore the challenges facing the chocolate sector in navigating a volatile supply landscape. With cocoa prices unlikely to ease soon, consumers can expect sustained upward pressure on retail prices. The industry’s ability to innovate—through both technological advancements and supply chain optimization—will be critical in mitigating long-term cost impacts.

Source: [1] [title1] [url1] https://fortune.com/2025/07/23/hershey-chocolate-price-increases-cocoa-costs/