Hershey is expanding efforts to build a more resilient cocoa supply chain as it works to manage rising commodity costs. The company is focusing on diversified sourcing, long-term farmer programs, and tighter cost controls to help offset price fluctuations, according to Chief Supply Chain Officer Jason Reiman.
During Hershey’s Investor Day last month, Reiman said the company is broadening cocoa sourcing beyond major producing countries such as Ivory Coast and Ghana. Hershey is increasing procurement from additional origins including Ecuador and Brazil, a move intended to strengthen supply reliability and reduce dependence on any single region.
Reiman said building a resilient supply network allows the company to improve agility and better align capacity with future growth. He added that Hershey is also evaluating cocoa alternatives as part of its broader strategy to manage supply constraints and price volatility.
The company’s focus on sourcing resilience follows a period of elevated cocoa prices, which have placed pressure on costs across the confectionery sector. To manage this environment, Hershey has used hedging contracts to lock in pricing and limit exposure to market swings. Reiman noted that the company relies on a structured commodities governance framework designed to reduce risk while maintaining competitive pricing.
According to Hershey, its approach combines derivatives, market intelligence, and formal oversight of commodity positions. These financial tools are intended to reduce volatility and support more predictable input costs compared with market fluctuations.
In addition to financial strategies, Hershey is investing in long-term supply stability through farmer-focused initiatives. The company’s Income Accelerator Program, implemented with cocoa farmers in Ivory Coast, promotes improved agricultural practices, higher productivity, and increased household income. The program is designed to strengthen long-term supply availability while supporting farming communities.
Hershey is also pursuing research and development efforts aimed at improving cacao tree resilience to disease and drought. These initiatives are intended to enhance crop stability and reduce supply disruptions tied to environmental and climate-related challenges.
The company is further investing in manufacturing to support what it describes as “chocolate resiliency.” Hershey opened its first fully digitally integrated chocolate processing facility last year. The 250,000-square-foot facility in Hershey, Pennsylvania, is part of a multi-year $1 billion investment across the company’s North American operations.
The broader investment includes the addition of 13 new production lines and upgrades to 11 existing lines. Hershey said the modernization effort is intended to increase capacity, improve operational efficiency, and support long-term supply chain flexibility as cocoa markets continue to fluctuate.
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