Hershey's chocolate is about to get more expensive.
The candy company is planning to raise the prices of a fifth of its products by about 2.5%, Hershey reiterated on Thursday. The changes will go into effect next year.
Business and industry sectors
Business, economy and trade
Food and drink
Kinds of foods and beverages
Packaged candy and desserts
Sweets and desserts
One of many companies getting squeezed by rising commodity and shipping costs, Hershey hopes higher prices will offset those costs without scaring away customers.
Hershey (HSY) first said that it would raise prices over the summer, citing rising operational costs. "Our new pricing approach is much more precise," said CEO Michele Buck at the time.
Chief Financial Officer Patricia Little said on Thursday that Hershey started feeling the impact of higher freight and logistics last year.
"I don't expect that to change going forward into next year," she said.
The company is doing more than just increase prices to drive growth.
Hershey is investing in digital to keep impulse shopping alive online. It's also introduced new products like Hershey's Gold, a "caramelized creme" bar with pretzels and peanuts baked inside, and Reese's Outrageous, a peanut butter chocolate bar with Reese's candy inside.
Next year, the company will introduce Reese's Thins, a 40% thinner Reese's peanut butter cup.
Plus, the company has been scooping up healthier brands, including Pirate Brands, which makes Pirate's Booty, Smart Puffs and Original Tings.
Last year, Hershey's bought Amplify Snack Brands, which makes SkinnyPop popcorn and Oatmega whey-protein bars, for $1.6 billion. Pirate Brands will operate within Amplify's hub in Austin, Texas.
The acquisitions boosted sales in the third quarter. Sales increased by 2.9% in the three months that ended in September compared to the same period last year.
- Hershey will raise chocolate prices next year
- Sweet and salty! Hershey buys SkinnyPop maker
- Kiss of death? Healthier eating and surging cocoa prices are hurting Hershey
- Netflix is raising its subscription prices
- Hershey's buys Pirate's Booty to double down on healthy snacks
- Apple continues its year of price hikes
- Does chocolate milk represent racial diversity?
- What makes chocolate chip cookies so addictive?
- Walt Disney raises ticket prices to theme parks
- Amazon is raising the price of Prime to $119