A chocolate crisis is happening because there is not enough cocoa beans to make chocolate. Cocoa beans come from a special tree in West Africa. The people who grow the trees are very poor and cannot make their farms better. Because of this, they can't grow as many beans as before. This means there is less chocolate for everyone. So, your candy bar might get smaller or cost more money. Read from source...
- The article starts by implying that chocolate bars are getting smaller and prices are rising due to a cocoa crisis. However, it does not provide any concrete evidence or data to support this claim. It seems like an exaggeration or a clickbait title to grab the reader's attention.
- The article mentions Hershey as an example of a company that is affected by the rising cocoa prices and lower yields. However, it does not explain how Hershey calculates its earnings or what factors influence its profitability. It also does not compare Hershey's performance with other similar companies in the same industry or market segment.
- The article quotes Javier Blas, a columnist for Bloomberg and ex-FT commodities correspondent, as an expert on the cocoa crisis. However, it does not disclose any of his potential conflicts of interest or biases that may affect his credibility or objectivity. For example, he may have personal ties to the chocolate industry, or he may benefit from the decline in cocoa prices due to his own investments or trading activities.
- The article blames the cocoa crisis on the poverty and lack of reinvestment among West African farmers who grow cocoa trees. However, it does not acknowledge any other possible causes or contributors to the problem, such as climate change, pests, diseases, political instability, trade barriers, market fluctuations, consumer preferences, etc. It also does not suggest any potential solutions or interventions that could help improve the situation of the farmers and the supply chain of cocoa.
- The article concludes by stating that chocolate prices are about to rise and bars and boxes will shrink too. However, it does not provide any projections or estimates on how much or how fast this change will happen, or what the implications or consequences will be for consumers, producers, retailers, or other stakeholders. It also does not offer any alternative options or alternatives to chocolate that could satisfy the consumer's demand and preference for sweets.
Bearish
Summary: The article discusses the chocolate crisis that is causing smaller and pricier Hershey's bars. The main reasons are higher raw materials costs and historic cocoa prices. This means consumers will either pay more or get less chocolate in their bars.
1. Buy Mondelez International (MDLZ) stocks as they are less dependent on cocoa prices and have a diversified product portfolio that includes snacks, biscuits, and beverages. They also have strong emerging market presence and cost-saving initiatives in place to mitigate the impact of rising raw material costs.
2. Sell Hershey (HSY) stocks as they are more exposed to cocoa price fluctuations and have a limited product portfolio that mostly relies on chocolate products. They also face increased competition from private label brands and are struggling with higher operational costs due to the cocoa crisis.
3. Monitor Cargill (CARG) stocks as they are one of the largest global suppliers of cocoa and other agricultural commodities. They have a vertically integrated business model that allows them to source, process, and distribute cocoa products efficiently. However, their profitability is highly dependent on cocoa prices and demand dynamics in the chocolate industry.