Executives from Hershey Co. and Mondelez International Inc. have indicated that further price increases may occur as chocolate manufacturers face a sustained rise in cocoa prices.
"We have taken and are taking aggressive steps to manage the environment of the commodities we find ourselves in," said Hershey's Chief Financial Officer, Steve Voskuil, during a presentation at the Consumer Analyst Group conference in New York on Tuesday. Voskuil noted that much of the company's candy products in the U.S. experienced a "double-digit price increase" last year. Although the company does not comment on future increases, "you can imagine this will be important for us as we look ahead and observe what is happening with commodity products," he said.
Shortly after, at a different presentation at the same event, Mondelez CEO Dirk Van de Put said that the chocolate maker Milka and Toblerone is keeping an eye on demand levels while implementing "significant price increases." Van de Put added that "Consumers will have to get used to chocolate that is 30%, 40%, 50% more expensive than before," and added that even with higher prices, he expects sales volumes to remain.
The price of chocolate contrasts with other consumer goods, where consumers weary of inflation have led companies to largely halt price increases or even start offering discounts. However, the fact that cocoa prices nearly tripled last year has put pressure on Mondelez and Hershey in recent months. Over the last six months, Mondelez's shares have fallen nearly 14%, while Hershey's have dropped close to 17%.
