HACKETTSTOWN, N.J. -- Mars Chocolate North America, a unit of Mars Inc., has raised wholesale prices for U.S. chocolate products by about 7% to offset rising costs, the M&Ms and Snickers maker said late last week, according to a Wall Street Journal report.
The announcement comes a week after The Hershey Co. raised its wholesale prices by 8% due to higher costs for cocoa, milk and other commodities.
"Mars Chocolate implements price increases only after careful consideration," spokesperson Ampy Vasquez told the newspaper. "In the three years since our last price increase, in March 2011, we have invested significantly in the category and have experienced a dramatic increase in our costs of doing business."
Cocoa-bean prices have risen 18% this year as demand for the key chocolate ingredient surpassed traders' expectations, said the report. On Thursday, the most actively traded cocoa contract on the ICE Futures U.S. exchange hit $3,234 a ton, the highest price since July 6, 2011.
Cocoa grindings, a gauge of demand for chocolate, have surged, particularly as consumption in emerging markets has risen. In the second quarter of the year, the latest data available, cocoa processors in Asia ground 161,805 metric tons of beans, up 5.2% compared with the same period of 2013, the report said, citing the Cocoa Association of Asia. The data followed a 4.5% increase in North American second-quarter grindings, which topped market expectations of a 2% to 3% increase.
In other company news, Mars Inc. has published its fourth annual Principles in Action Summary, which details the company's approach to business. This includes a target for the private, family-owned business to eliminate all fossil fuel energy use and greenhouse gas emissions from its direct operations by 2040, ensuring a sustainable supply chain and health and wellness.
Mars Chocolate North America, Hackettstown, N.J., is the North American chocolate operations of Mars Inc. McLean, Va.-based Mars has net sales of more than $33 billion, six business segments including Chocolate, Wrigley, Food, Drinks, Petcare and Symbioscience.
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