by Shara Rutberg
Sometimes you feel like a nut.
Sometimes you don't.
Either way, you'll have to pay more to indulge.
It costs more than peanuts to produce a candy bar these days. The Hershey Company announced an average 11 percent price increase in wholesale prices across its U.S., Puerto Rico and export chocolate and sugar confectionery lines effective immediately. Officials at the Hershey, Pa.-based candy maker hope the increase will help offset the growing costs of raw materials, packaging, fuel utilities and transportation. This is the second such increase this year. In April, Hershey raised wholesale prices by 4 percent to 5 percent.
Hershey, the nation's largest confectioner, acquired Ashland, Ore.-based Dagoba Organic Chocolate in October 2006 as part of its Artisan Confections unit.
"Commodity costs have been volatile over the last several years and continue to remain at levels that are well above historical averages," said David J. West, president and CEO, The Hershey Company in a statement. "Market prices for ingredients such as cocoa, corn sweeteners, sugar and peanuts are up 20 [percent] to 45 percent since the beginning of the year. As such, in 2009, we expect our commodity cost increase to be more than double the 2008 increase."
Cocoa prices doubled since the beginning of 2006/2007 cocoa season through June 2008, according to the London-based International Cocoa Organization. Last month, the price of cocoa futures reached a 28-year high.
Hershey said its commodities costs will grow by more than $110 million this year. That figure could double in 2009. Hershey also narrowed its 2008 earnings and revenue guidance in light of the price hikes.
On the bright side for consumers, although chocolate prices have gone up, the calorie count remains the same.