Hershey's Finances Are Stronger Than Anticipated

It's been a particularly rough year for the chocolate industry. In early 2022, The Wall Street Journal reported that West Africa had fallen into a drought, which would ultimately lead to a poor cocoa bean harvest. Being that the Ivory Coast is the global leader in cocoa bean exports, chocolate companies were hit hard. With the rising cost and shortage of other ingredients including sugar, milk, and peanut butter, according to FOX Business, both local chocolate factories and major producers like Hershey's had no choice but to increase their prices.

Fortunately, as Reuters shares, things are looking up for the next cocoa bean harvest. Weather conditions have been so favorable that rainfall is now higher than the five-year average in many regions. As long as the fields don't flood and ruin the plants, farmers predict an abundant crop come September, and that'll take some pressure off Hershey's and other companies that depend so heavily on it.

Facing inflation, supply chain issues, and a cocoa bean shortage, you'd expect Hershey's to struggle financially, but business is actually thriving for the confectionary conglomerate. As President and CEO Michele Buck revealed in a press release, Hershey's has still been able to drive enough sales to make a significant profit. The second quarter of 2022 saw stronger earnings per share thanks to the acquisition of Pretzels, Dot's, and Lily's, as well as an overall 19.3% increase in net sales, and a 5.5% increase in net income (per the press release).

"These results reflect the strength and resilience of our categories, consumers' love for our brands, the investments we are making in our business, and the exceptional execution of our dedicated employees," Buck shared. Surely the newly-abundant cocoa bean harvest will also contribute to financial gains, so with Hershey's doing better than anticipated, hopefully it means that chocolate prices can eventually go back to normal.