U.S. chocolate giants Hershey and Mondelez International are preparing to address the recent surge in cocoa and sugar prices as they gear up to unveil their first-quarter results. Both companies, deeply involved in confectionery and snack manufacturing, have faced heightened costs over recent quarters, prompting them to pass on some of the burden to consumers through price hikes. However, the recent sharp increase in cocoa prices, driven by supply shortages caused by droughts, erratic rainfall, and crop diseases in key cocoa-producing regions, could pose further challenges for these industry giants. Additionally, sugar prices have also experienced a notable spike in recent months, exacerbating the cost pressures faced by Hershey and Mondelez.
The two companies are under pressure to reassure investors and stakeholders about their strategies for managing the impact of soaring cocoa and sugar prices while maintaining their market competitiveness. In their 2023 financial reports, Mondelez revealed robust performance metrics, including a 14.4 percent increase in net revenues for the full year, driven by organic net revenue growth of 14.7 percent. Similarly, Hershey, which is committed to achieving 100 percent sourcing visibility in Côte d'Ivoire and Ghana by 2025, reported annual revenue of $11.165 billion for 2023, marking a 7.16 percent increase from the previous year.