Hershey’s to increase wholesale prices 8 percent for candy, grocery lines
Company announces preliminary second quarter results, updates 2014 outlook.
The Hershey Co. is increasing its wholesale prices across the majority of its U.S., Puerto Rico and export portfolio.
The weighted average price increase will be about 8 percent across the company's instant consumable, multi-pack, packaged candy and grocery lines. The increase went into effect Tuesday.
The increases are a result of Hershey’s higher input costs, including more expensive raw materials, packaging, fuel, utilities and transportation, which the company expects to incur in the future.
“Over the last year, key input costs have been volatile and remain at levels that are above historical averages,” says Michele G. Buck, president, North America, The Hershey Co. “Commodity spot prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year. Given these trends, we expect significant commodity cost increases in 2015.”
He says that during the transition period, Hershey will support its brands with more merchandising, programming, advertising and innovation.
Customers who buy directly from Hershey will have an opportunity to purchase transitional amounts of product at price points prior to the announcement during a four-week period that lasts until Aug.12, 2014.
The company does not expect seasonal net price realization until Halloween 2015. Given this timing, the company does not expect yesterday's announcement to have a material impact on its financial results in 2014. Therefore, the expectation is that the majority of the financial benefit from this pricing action will impact earnings in 2015.