Hershey is to up the wholesale price on some of its lined by an average of almost 10% to offset part of the “significant” increase in input costs.
The US confectioner said yesterday (30 March) that on a “weighted average” basis the price of its “instant consumable, multi-pack, packaged candy and grocery lines” would rise rise by 9.7%.
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The price increase – to cover costs including raw materials, packaging and fuel – will take in the “majority” of Hershey’s portfolio in the US, Puerto Rico and export markets.
“We remain committed to the higher levels of global brand support, consumer spending and investment in go-to-market capabilities communicated in February,” said president and CEO Dave West. “We will work with our retail customers to ensure that the implementation of the price increase is supported with customer trade promotions and merchandising that continues to grow the category.”
In February, when Hershey issued its 2010 results, the company said, for instance, that its advertising spend would increase in the “mid single-digits” to support NPD and “core” brands in the US and overseas.
West added: “Direct buying customers will be able to purchase transitional amounts of product into May, and we do not expect seasonal net price realisation until Easter 2012. Given this timing and some higher than anticipated costs, we do not expect this action to materially impact our financial expectations this year. We expect the majority of the financial benefit from this pricing action to impact our earnings in 2012.”
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