Hershey’s Finds the Sweet Spot in a Bitter Cocoa Market

Chocolate makers are being squeezed by the very ingredient that defines them. Cocoa prices have nearly tripled since 2023, as weather chaos in West Africa throttles 70% of global supply, leaving the entire sector stuck between shrinking margins and vanishing market share. While rivals are melting under the pressure, HersheyHSY

has managed to hold its shape.

The sweet advantage: Hershey managed to do what competitors can’t afford to — raise prices without losing demand. The company pushed through 26% hikes on Kit-Kat, Reese’s, and PayDay bars that retailers like Sheetz have already implemented, and consumers kept buying. Goldman Sachs called it “historically strong pricing power,” highlighting candy’s role as an “affordable luxury” people rarely cut back on. That pricing muscle is now driving share gains in seasonal candy, mints, and sweets, supported by improving merchandising at convenience stores. These wins led Goldman to upgrade Hershey to a Buy rating, saying cost pressures like cocoa and tariffs are already baked in.

• In Q2 2025, the chocolate veteran topped Wall Street expectations, with total net sales up 26%, though its stock has lagged the broader market with a 13.2% gain this year.
• Competitors are also moving to protect margins, with LindtLDSVF
  raising prices 15.8%, and Mondelēz InternationalMDLZ
  signaling similar increases across key product lines.

Snacking on Opportunity

Just months ago, Hershey was the worst-performing stock in the S&P 500 — a drop that coincided with the announcement of its new chief executive. Since then, CEO Kirk Tanner has worked to steady the business by reshaping strategy and tightening operations. Hershey recognizes that managing cocoa volatility takes more than raising prices — it requires building new categories that can grow without depending on chocolate. To address this, the brand has been expanding into new product lines and testing fresh consumer segments.

• It launched Shaq-A-Licious XL Gummies with Shaquille O’Neal, selling more than 11M units in 2024 and becoming its top candy debut of the year.
• Hershey also expanded its salty snacks portfolio through SkinnyPop and Dot’s Pretzels, creating revenue streams that shield against cocoa costs and private-label competition.

Sweet talk: The pivot positions Hershey as a broader snacking powerhouse, giving it room to innovate while reducing exposure to commodity-driven headwinds. Meanwhile, the holiday season may deliver a short-term lift from Halloween candy and Christmas chocolate. Still, Hershey’s will need to prove to investors that soaring cocoa costs won’t leave a bitter aftertaste once the celebrations are over.