In their earnings report yesterday, HSY made no mention of the fact that the price of cocoa has increased quite a lot in recent months, and with futures also extremely high this looks set to continue.
The clear answer to the question is yes, it could hurt them, but I’d be curious to hear other’s opinion. Do you think HSY would be able to offset all that additional cost to consumers and still maintain their margins? Not to mention that Hershey chocolate is actually quite low in cocoa by composition – about 11% for milk chocolate. The darker chocolate has a higher cocoa content – 45-60% there.
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