Hershey Warns Cocoa Tariffs Could Add $100 Million to Costs

Hershey is pressing the White House to exempt cocoa from mounting tariffs, warning that an intensifying trade conflict could further inflate chocolate prices for consumers.

The Pennsylvania-based maker of Kisses and Almond Joy told investors it expects to absorb $15 million to $20 million in tariff-related costs during the second quarter as it continues using existing cocoa inventories. However, the company anticipates those costs could soar to as much as $100 million in the second half of the year as stockpiles dwindle.

“We’ve got the most effort focused on influencing government action, using every lever at our disposal to get those tariffs changed, particularly with respect to cocoa,” said CFO Steve Voskuil.

CEO Michele Buck echoed that urgency, stating in prepared remarks tied to Hershey’s first-quarter earnings: “Cocoa cannot be grown in the United States and thus, we are engaging with the U.S. government to seek an exemption.”

Hershey is working alongside lawmakers and industry trade groups to convince the Trump administration to exclude cocoa from the widening list of tariffs.

The company, like others in the chocolate industry, sources most of its cocoa from West Africa—particularly Ivory Coast and Ghana, the world’s largest producers. Cocoa imports are already subject to a 10% base tax, but President Trump has threatened to impose an additional 21% retaliatory tariff on cocoa from the Ivory Coast, the steepest rate proposed for any West African nation.

Beyond the threat of tariffs on cocoa imports, Hershey also faces exposure to retaliatory trade measures by Canada, a major hub for cocoa processing.

The rising tariff pressures come on top of an already volatile cocoa market. Global prices have surged over the past year due to weather disruptions, crop disease, and strong consumer demand. While prices have eased slightly from historic highs in 2024, they remain significantly elevated.

To offset these challenges, major chocolate manufacturers including Hershey and Mondelēz International raised prices last year—a move that could repeat if costs continue to climb.

Despite the headwinds, Hershey said it has “robust mitigation plans” in place to manage the impact and reduce costs where possible. Still, the company warned that without federal intervention, cocoa tariffs could become a major burden in the months ahead.