Nestlé USA will increase prices on popular chocolate products such as Toll House morsels, baking cocoa, and fudge kits starting June 23, citing a surge in cocoa prices. The decision reflects persistent cost pressures in the food sector, despite easing overall grocery inflation.

🔍 Key Takeaways:

• Cocoa Futures Spike: Prices hit nearly $13,000 per ton in 2024 due to crop failures in West Africa.

• Affected Products: Nestlé’s Toll House range among those facing hikes.

• Not Tariff-Related: Price changes are not tied to recent US trade tariffs.

• Margins Under Pressure: Nestlé seeks CHF700M ($843M) in savings, mostly via procurement.

• Retailer-Driven Pricing: Final shelf prices will depend on retailers’ discretion.

CEO Laurent Freixe emphasized that the company is “taking as much price as we can” to offset commodity pressures while staying competitive.

📉 Impact on Consumers

US chocolate prices are already up 18% in the past two years, per NIQ. Nestlé competitors like Hershey and Mondelez report falling volumes and are adjusting packaging strategies to offer lower-cost options.