On Thursday, one of the world’s largest chocolate makers, Hershey, warned that “historic cocoa prices are expected to limit earnings growth this year.” The company’s CEO, Michele Buck, did not rule out raising prices for customers either. “Given where cocoa prices are right now, we will use all tools, including pricing, to manage the business,” he said.
Last month, Mondelez, the company behind the Cadbury brand, identified rising ingredient costs as one of its challenges in the coming year.
Cocoa prices have been boosted by poor crop averages in West Africa, the area that produces most of the world’s cocoa supply. The El Niño weather phenomenon has caused drier weather in Ghana and Ivory Coast, the world’s largest producers of cocoa beans.
Higher temperatures and shifts in rainfall patterns caused by climate change may also affect crop yields.