The cocoa cost problem is the same. The exposure is not.
Cocoa prices surged to historic highs through 2024 and into 2025, driven by poor harvests in West Africa. Both Mondelez and Hershey source significant quantities of cocoa, so both are dealing with the same underlying commodity shock. But the size of the bill landing on each company's desk looks different once you account for geography and hedging.
Mondelez generates roughly 75 percent of its net sales outside the United States, spread across Europe, Latin America, the Middle East, Africa, and Asia Pacific. That breadth does not make cocoa cheap, but it does mean the company can offset cost pressure in one region with stronger performance in another, and it can price differently in markets where consumer tolerance varies. Hershey, by contrast, earns the large majority of its money in North America. When US consumers start resisting price rises, Hershey has fewer places to hide.
What the earnings calls said about pricing
Mondelez management has consistently framed pricing as a tool to recover input costs while protecting long-run volume. On its most recent earnings calls, the company described a strategy of taking measured price increases alongside pack-size and mix management, and it has pointed to emerging markets as a source of volume growth even when developed markets slowed. The company acknowledged that consumers in some markets are trading down, but argued that its biscuit and chocolate brands retain enough loyalty to hold share at modest price premiums.
Hershey's earnings narrative has been more defensive. The company has raised prices on its US chocolate portfolio, and those increases have weighed on volume. Hershey management has acknowledged that the American consumer is feeling pressure and that elasticity, the relationship between a price rise and a drop in units sold, has been less forgiving than in prior cycles. The company has responded with promotional investment to protect shelf velocity, which has partly offset the benefit of the price increases.
Neither company's leadership has suggested the cocoa cost problem goes away quickly. Both have signaled that hedging provides some near-term buffer, but that the full impact of higher cocoa prices will continue to flow through the cost line.
US versus international mix
This is the sharpest structural difference between the two companies. Mondelez's international footprint is both its main competitive advantage and its main complexity. Running a business across dozens of currencies and regulatory environments adds cost and risk. But it also means that a slowdown in one large market, say a US consumer pullback on discretionary snacks, does not determine the whole result.
Hershey has made moves to diversify, including its acquisition of snacking brands such as Dot's Pretzels and SkinnyPop popcorn. Those acquisitions have added non-chocolate sales and reduced the company's dependence on cocoa. But Hershey remains a predominantly US-focused business, and that concentration is a real constraint when US consumers are under pressure from gas prices, food inflation, and uncertainty about the economic outlook.
Category resilience: what both companies argue
Both Mondelez and Hershey have made versions of the same argument on earnings calls: confectionery is a resilient category because consumers treat small chocolate purchases as affordable treats even when budgets are tight. The academic term for this is the "lipstick effect," though neither company uses that phrase. The practical version is that a two-dollar chocolate bar feels different to a stressed consumer than a twenty-dollar discretionary purchase.
The argument has held up reasonably well historically. But the current cycle is testing it. US chocolate volumes have declined as prices rose faster than in prior inflationary periods. Hershey's results show this more clearly than Mondelez's, partly because Mondelez's international growth can mask domestic softness.
Mondelez's CEO has pointed to the company's emerging-market presence as evidence that the category can still grow in volume terms globally, even if developed-market volumes are flat or slightly negative. Hershey's leadership has been more focused on the path back to volume growth in the US specifically.
Cocoa hedging and margin trajectory
Both companies hedge their cocoa purchases forward, which means the full pain of the 2024 price spike did not land immediately. The lag works in both directions: when cocoa prices were rising fast, hedging protected margins for a time. Now that higher prices are locked into forward contracts, both companies will continue to absorb elevated costs even if spot prices ease.
Mondelez has described cocoa as its single largest input cost and has been explicit that the hedging buffer is finite. The company has pointed to pricing, mix, and cost savings elsewhere in the business as the tools it has to protect profit margins. Hershey has made similar comments, with the added wrinkle that its US-heavy business faces a consumer base that has already absorbed several rounds of price increases and is showing signs of fatigue.
Leadership tone
Mondelez's leadership tone on recent calls has been cautiously confident. The message has been that the global footprint provides resilience, that the brand portfolio is strong enough to take price, and that emerging markets offer a growth runway that pure US players do not have. There is an acknowledgment of difficulty, but the framing is broadly optimistic about the company's ability to manage through the cycle.
Hershey's tone has been more measured. Management has been candid about volume declines, about the limits of pricing power in the current US environment, and about the work needed to stabilize the business. That candor is not necessarily a negative signal. It reflects a tighter geographic focus where there is less room to point elsewhere when the core market is under pressure.