Sharp Cocoa Price Decline Raises Hopes for Chocolate Industry Recovery
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy HSY?
Source: seekingalpha
- Price Decline Impact: Cocoa futures have plummeted approximately 75%, allowing chocolate manufacturers to potentially resume processing beans, which could lead to lower candy prices, although many manufacturers are still working through previously purchased expensive inventory, delaying benefits for consumers.
- Demand and Supply Changes: Improved sentiment in the chocolate industry is attributed to weaker demand, better harvests, and expectations for a larger surplus, despite the spike in cocoa prices in 2024 due to tight supply from West Africa affecting market demand.
- Climate Impact Analysis: The surge in cocoa prices in 2024 was primarily driven by El Niño-related dry weather, followed by heavy rains and crop diseases, while aging cocoa trees and underinvestment further negatively impacted output, exacerbating market instability.
- Industry Company Responses: Major companies such as Mondelez, Nestlé, and Hershey have mentioned the impact of high cocoa prices during earnings calls, indicating the industry's sensitivity to raw material cost fluctuations and its potential implications for future pricing strategies.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy HSY?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on HSY
Wall Street analysts forecast HSY stock price to rise
17 Analyst Rating
3 Buy
14 Hold
0 Sell
Hold
Current: 191.890
Low
181.00
Averages
196.27
High
222.00
Current: 191.890
Low
181.00
Averages
196.27
High
222.00
About HSY
The Hershey Company is a snacks company. The Company's segments include North America Confectionery, North America Salty Snacks and International. The North America Confectionery segment is responsible for its traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes its business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes its retail operations. The North America Salty Snacks segment is responsible for its salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks. The Company's portfolio includes chocolate and confectionery brands such as Hershey's, Reese's, Kisses, Kit Kat, Jolly Rancher, Ice Breakers, LesserEvil, Shaq-a-licious alongside salty snacks, including SkinnyPop and Dot's Homestyle Pretzels.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Sharp Cocoa Price Decline Raises Hopes for Chocolate Industry Recovery
- Price Decline Impact: Cocoa futures have plummeted approximately 75%, allowing chocolate manufacturers to potentially resume processing beans, which could lead to lower candy prices, although many manufacturers are still working through previously purchased expensive inventory, delaying benefits for consumers.
- Demand and Supply Changes: Improved sentiment in the chocolate industry is attributed to weaker demand, better harvests, and expectations for a larger surplus, despite the spike in cocoa prices in 2024 due to tight supply from West Africa affecting market demand.
- Climate Impact Analysis: The surge in cocoa prices in 2024 was primarily driven by El Niño-related dry weather, followed by heavy rains and crop diseases, while aging cocoa trees and underinvestment further negatively impacted output, exacerbating market instability.
- Industry Company Responses: Major companies such as Mondelez, Nestlé, and Hershey have mentioned the impact of high cocoa prices during earnings calls, indicating the industry's sensitivity to raw material cost fluctuations and its potential implications for future pricing strategies.
See More
Hershey Company to Release Q1 Earnings on April 30, 2026
- Earnings Release Announcement: The Hershey Company has announced that it will release its first-quarter sales and earnings results on April 30, 2026, highlighting its commitment to transparency and investor communication.
- Analyst Conference Call: On the same day as the earnings release, the company will hold a conference call with analysts at 8:30 a.m. ET, providing further insights into its financial performance and addressing investor inquiries, which is expected to bolster market confidence.
- Live Webcast Format: The conference call will be hosted via a live webcast on the Hershey corporate website, ensuring that all investors and stakeholders can access real-time information, thereby enhancing the breadth and timeliness of information dissemination.
- Focus on Investor Relations: By regularly releasing earnings reports and holding analyst meetings, Hershey demonstrates its commitment to investor relations, aiming to build trust in the market through transparent communication.
See More
Hershey Company to Release Q1 Earnings on April 30, 2026
- Earnings Release Announcement: The Hershey Company has announced that it will release its first-quarter sales and earnings results on April 30, 2026, demonstrating the company's commitment to transparency and investor communication.
- Analyst Conference Call: On the same day as the earnings release, the company will hold a conference call with analysts at 8:30 a.m. ET, aimed at sharing financial performance and future outlook, thereby enhancing market confidence.
- Live Webcast Format: The conference call will be hosted via a live webcast on the Hershey corporate website, indicating the company's ongoing efforts in digital communication to better serve its investors.
- Investor Engagement Platform: Hershey provides detailed information for the webcast, emphasizing its focus on investor relations and aiming to enhance investor engagement and trust through transparent information sharing.
See More
Three Candy Stocks Experiencing a Spring Surge in Sales
Candy Stock Trends: Despite the calendar indicating spring, candy stocks are performing well, with Halloween and Christmas seen as key periods for chocolate sales, while Easter and Mother's Day are crucial for overall candy sales.
Investor Sentiment: Investors are cautious about the sustainability of positive returns in the candy sector, particularly due to rising cocoa prices and tariffs affecting future sales.
Company Performance: Hershey and Mondelez are highlighted as strong performers, with Hershey pivoting towards salty snacks and Mondelez showing steady growth, appealing to institutional investors.
Market Recommendations: Analysts suggest that certain candy stocks are currently undervalued, presenting buying opportunities for retail investors, especially as broader market conditions may favor these companies.
See More
Hershey's Returns to Original Reese's Recipe Amid Ingredient Controversy
- Recipe Reversion: Hershey's decision to revert to the original Reese's recipe responds to accusations from the founder's family, emphasizing the importance of brand reputation and aiming to rebuild consumer trust while maintaining brand integrity.
- Ingredient Adjustments: Chief Growth and Marketing Officer Stacy Taffet announced improvements to the KitKat recipe alongside Reese's, ensuring all products align with classic milk and dark chocolate recipes to enhance overall product quality.
- Market Reaction: Brad Reese, grandson of the founder, expressed dissatisfaction with the ingredient changes, highlighting consumer concerns regarding brand transparency and ingredient quality, which reflect a growing demand for authenticity in food products.
- Cost Factors: Although cocoa prices had previously surged, they have significantly decreased recently, suggesting that the ingredient changes may not be primarily driven by cost pressures, but rather indicate Hershey's strategic balancing act between brand governance and consumer expectations.
See More
Hershey Responds to Controversy Over Product Formulations
- Recipe Adjustment Plan: Hershey plans to replace the chocolate compound coating in its Reese's and Hershey's products by 2027 with more traditional formulations, aiming to restore consumer trust in the brand while addressing criticism from the founder's descendants regarding ingredient changes.
- Brand Trust Crisis: Brad Reese, the grandson of the founder, accused Hershey of replacing milk chocolate with compound coatings in multiple products, claiming this undermines the Reese's brand reputation and could lead to short-term sales declines, impacting the company's performance.
- Market Performance Volatility: Despite Hershey's stock rising 14% in 2023, the controversy over product formulations has sparked discussions on social media that may negatively affect sales in the near term, causing the stock price to trade sideways amid market volatility.
- Future Growth Expectations: Hershey reiterated its fiscal year 2026 guidance, projecting a 15% to 20% earnings per share growth for fiscal year 2027, demonstrating confidence in its profitability outlook despite the challenges posed by the formulation controversy.
See More
Sharp Cocoa Price Decline Raises Hopes for Chocolate Industry Recovery
- Price Decline Impact: Cocoa futures have plummeted approximately 75%, allowing chocolate manufacturers to potentially resume processing beans, which could lead to lower candy prices, although many manufacturers are still working through previously purchased expensive inventory, delaying benefits for consumers.
- Demand and Supply Changes: Improved sentiment in the chocolate industry is attributed to weaker demand, better harvests, and expectations for a larger surplus, despite the spike in cocoa prices in 2024 due to tight supply from West Africa affecting market demand.
- Climate Impact Analysis: The surge in cocoa prices in 2024 was primarily driven by El Niño-related dry weather, followed by heavy rains and crop diseases, while aging cocoa trees and underinvestment further negatively impacted output, exacerbating market instability.
- Industry Company Responses: Major companies such as Mondelez, Nestlé, and Hershey have mentioned the impact of high cocoa prices during earnings calls, indicating the industry's sensitivity to raw material cost fluctuations and its potential implications for future pricing strategies.
See More
Hershey Company to Release Q1 Earnings on April 30, 2026
- Earnings Release Announcement: The Hershey Company has announced that it will release its first-quarter sales and earnings results on April 30, 2026, highlighting its commitment to transparency and investor communication.
- Analyst Conference Call: On the same day as the earnings release, the company will hold a conference call with analysts at 8:30 a.m. ET, providing further insights into its financial performance and addressing investor inquiries, which is expected to bolster market confidence.
- Live Webcast Format: The conference call will be hosted via a live webcast on the Hershey corporate website, ensuring that all investors and stakeholders can access real-time information, thereby enhancing the breadth and timeliness of information dissemination.
- Focus on Investor Relations: By regularly releasing earnings reports and holding analyst meetings, Hershey demonstrates its commitment to investor relations, aiming to build trust in the market through transparent communication.
See More
Hershey Company to Release Q1 Earnings on April 30, 2026
- Earnings Release Announcement: The Hershey Company has announced that it will release its first-quarter sales and earnings results on April 30, 2026, demonstrating the company's commitment to transparency and investor communication.
- Analyst Conference Call: On the same day as the earnings release, the company will hold a conference call with analysts at 8:30 a.m. ET, aimed at sharing financial performance and future outlook, thereby enhancing market confidence.
- Live Webcast Format: The conference call will be hosted via a live webcast on the Hershey corporate website, indicating the company's ongoing efforts in digital communication to better serve its investors.
- Investor Engagement Platform: Hershey provides detailed information for the webcast, emphasizing its focus on investor relations and aiming to enhance investor engagement and trust through transparent information sharing.
See More
Three Candy Stocks Experiencing a Spring Surge in Sales
Candy Stock Trends: Despite the calendar indicating spring, candy stocks are performing well, with Halloween and Christmas seen as key periods for chocolate sales, while Easter and Mother's Day are crucial for overall candy sales.
Investor Sentiment: Investors are cautious about the sustainability of positive returns in the candy sector, particularly due to rising cocoa prices and tariffs affecting future sales.
Company Performance: Hershey and Mondelez are highlighted as strong performers, with Hershey pivoting towards salty snacks and Mondelez showing steady growth, appealing to institutional investors.
Market Recommendations: Analysts suggest that certain candy stocks are currently undervalued, presenting buying opportunities for retail investors, especially as broader market conditions may favor these companies.
See More
Hershey's Returns to Original Reese's Recipe Amid Ingredient Controversy
- Recipe Reversion: Hershey's decision to revert to the original Reese's recipe responds to accusations from the founder's family, emphasizing the importance of brand reputation and aiming to rebuild consumer trust while maintaining brand integrity.
- Ingredient Adjustments: Chief Growth and Marketing Officer Stacy Taffet announced improvements to the KitKat recipe alongside Reese's, ensuring all products align with classic milk and dark chocolate recipes to enhance overall product quality.
- Market Reaction: Brad Reese, grandson of the founder, expressed dissatisfaction with the ingredient changes, highlighting consumer concerns regarding brand transparency and ingredient quality, which reflect a growing demand for authenticity in food products.
- Cost Factors: Although cocoa prices had previously surged, they have significantly decreased recently, suggesting that the ingredient changes may not be primarily driven by cost pressures, but rather indicate Hershey's strategic balancing act between brand governance and consumer expectations.
See More
Hershey Responds to Controversy Over Product Formulations
- Recipe Adjustment Plan: Hershey plans to replace the chocolate compound coating in its Reese's and Hershey's products by 2027 with more traditional formulations, aiming to restore consumer trust in the brand while addressing criticism from the founder's descendants regarding ingredient changes.
- Brand Trust Crisis: Brad Reese, the grandson of the founder, accused Hershey of replacing milk chocolate with compound coatings in multiple products, claiming this undermines the Reese's brand reputation and could lead to short-term sales declines, impacting the company's performance.
- Market Performance Volatility: Despite Hershey's stock rising 14% in 2023, the controversy over product formulations has sparked discussions on social media that may negatively affect sales in the near term, causing the stock price to trade sideways amid market volatility.
- Future Growth Expectations: Hershey reiterated its fiscal year 2026 guidance, projecting a 15% to 20% earnings per share growth for fiscal year 2027, demonstrating confidence in its profitability outlook despite the challenges posed by the formulation controversy.
See More
