Hershey and Mondelez bet big on Easter as cocoa price crisis looms

Hershey, Mondelez and other confection-makers are employing promotions and pitching more non-chocolate Easter treats like cookies ‘n’ cream bunnies as soaring cocoa prices threaten their profits and shoppers balk at high prices.

With “impulse buys” of chocolate and candy at convenience stores and in grocery checkout lines down, according to industry data, special occasions like Easter and Halloween are increasingly important to the companies’ sales.

Cocoa prices have tripled over the past 12 months thanks to bean disease in West Africa, which continues to worsen. Sugar prices are also up 7%.

Chocolate makers set plans for this Easter last year, and said they would hike prices again to cover the cocoa crunch. The companies face additional pressure on their profit margins as their hedges protecting commodity costs expire later this year and next.

But the price hikes are coming at a delicate time as inflation-weary consumers are already pushing back.

That makes seasonal sales key. Easter sales of candy in the US, the world’s biggest chocolate consumer, are expected to at least reach last year’s total of about $5.4bn (R102bn), though this will be driven mostly by price increases not volumes sold, according to the National Confectioners Association.

Easter is the third-biggest occasion in the US for buying chocolate and candies, with Halloween taking the top spot, followed by the winter holidays.

Data from the National Confectioners Association shows that last year, the volume of chocolate and candy sold for everyday occasions fell 3.6% compared to 2022.

Volumes of chocolate and candy sold for occasions like Easter rose slightly by 0.1%.

Hershey is shipping more non-cocoa treats to retailers this Easter in addition to its Reese’s chocolate bunnies and eggs. It is introducing a new six-pack of cookies ‘n’ cream bunnies and mixing Haribo gummy bears with chocolate bars in its assortment bags.

Hershey spokesperson Allison Kleinfelter said consumers were continuing to buy seasonal products because parents wanted to preserve traditions like Easter baskets filled with chocolate bunnies and egg hunts.

Simon Crowther, marketing director for seasonal confectionery UK at Mondelez, said the Oreo cookie-maker had introduced a new “Cadbury Ultimate Egg” range, and a premium Toblerone “Edgy Egg,” aimed at upmarket shoppers who may be more willing to splurge on chocolate.

US retailers have increased discounts on Cadbury, Reese’s, Hershey’s, M&Ms and Lindt this Easter, according to Dataweave. —