Hershey is countering volatile cocoa prices through diversified sourcing across Ecuador and Brazil, financial hedging tools, farmer-focused programs like the Income Accelerator Program in Ivory Coast, and a $1 billion modernization of North American facilities — including a new 250,000-square-foot digitally integrated plant in Hershey, PA. According to Chief Supply Chain Officer Jason Reiman, these efforts build both resilience and agility in cocoa supply. The strategy comes amid industry-wide pressure from surging cocoa costs affecting Hershey and Mondelēz International.
According to www.fooddive.com, Hershey is strengthening its cocoa supply chain resilience to mitigate the impact of soaring cocoa prices — a challenge that has pressured earnings for both Hershey and rival Mondelēz International.
Diversified Sourcing and Farmer Partnerships
Hershey’s Chief Supply Chain Officer Jason Reiman stated during the company’s Investor Day last month that the firm is diversifying cocoa sourcing beyond traditional market leaders Ivory Coast and Ghana to include countries such as Ecuador and Brazil. This geographic expansion supports a more robust and resilient supply network. Reiman emphasized that once resilience is established, the focus shifts toward building an agile network:
“Once we have a resilient supply network, we can turn it to how we think about an agile network.” — Jason Reiman, Chief Supply Chain Officer
Financial and Operational Safeguards
To manage price volatility, Hershey employs a disciplined commodities governance framework. Reiman described the company’s approach as a “sophisticated tool set for hedging,” combining derivatives, market intelligence, and formal oversight of commodity positions. This system aims to reduce volatility and maintain pricing competitiveness against peers.
Beyond financial instruments, Hershey deploys social initiatives to secure long-term, affordable cocoa supplies. Its Income Accelerator Program, implemented with farmers in the Ivory Coast, promotes good agricultural practices, higher productivity, and improved family income. Additional levers include R&D investments in cacao tree resilience to disease and drought.
Modernized Production Infrastructure
Hershey is also investing in “chocolate resiliency” through facility modernization. The company opened its first “fully digitally integrated facility” last year — a 250,000-square-foot chocolate processing facility in Hershey, Pennsylvania. This site is part of a multi-year, $1 billion investment in North American facilities, which includes adding 13 production lines and upgrading 11 existing lines.
Source: Food Dive
Compiled from international media by the SCI.AI editorial team.
