All right, settle in, folks, because today we’re going to try to out-Google Google with the next generation of search: Perplexity.
So, what exactly is Perplexity, and how’s it different from other AI chatbots like Gemini, ChatGPT, and Microsoft Copilot?
Gemini, ChatGPT, and Copilot are primarily generative AI tools meant for creating text, writing code, brainstorming ideas, and engaging in free-form conversations. They generate stuff based on their training data.
Perplexity is an answer engine. Its main job is to give you accurate, sourced answers to your questions by searching the internet in real time. It’s built for research and fact-finding. Instead of just generating text, it’s designed to summarize, synthesize, and cite information from across the web.
And the best part? A lot of Perplexity’s brainpower is available right out of the box for free, no wallet required. Lets take things for a spin using one overarching example throughout: the rapid evolution of electric vehicle (EV) battery technology.
Ask your question like a human
Perplexity understands natural language. Just type your question clearly, like you’re asking a person: “What are the latest breakthroughs in EV battery technology?”
Choose your sources
This is where you tell Perplexity where to look. Even with the free version, you get access to powerful source filters. Look for the “Set sources for search” dropdown in the lower-right corner of the search box. It looks like a globe.
Web (default) is for general news, current events, popular sites, and the like. For our EV example, this is perfect for getting an overview of “What are the latest breakthroughs in EV battery technology?” It’ll pull from tech blogs, auto news, and general science sites.
Academic sources is for scientific papers, scholarly articles, and research journals. Think: “Detailed chemical mechanisms of solid-state battery electrolytes.”
Social sources is for discussions, opinions, and real-world experiences from real people. Use Social and ask, “What are consumer experiences with EV range anxiety for new battery types?”
And Finance sources is best for market data, company reports, and investment news: “Investment trends for companies developing next-gen EV batteries.”
Follow up, then follow up some more
Perplexity is designed for conversation. After it gives you an answer, you can ask follow-up questions within the same thread.
Our initial “Web” search about EV battery breakthroughs mentioned “silicon anode technology.”
You can then type, “How does silicon anode technology impact charging times?” or, “What are the main challenges in using silicon anodes in mass production?”
Perplexity will remember your previous questions, making the conversation seamless.
Double-check the sources
Every single piece of information Perplexity gives you comes with clickable source citations.
If Perplexity states, “Solid-state batteries offer higher energy density (Source 1) and faster charging (Source 2),” those little numbers are links.
Click them to jump directly to the original article, research paper, or news report. This lets you fact-check Perplexity’s summary and see the information in its original context.
Leverage your daily free ‘Pro Searches’
Perplexity gives free users a limited number of Pro Searches per day. Think of these as a daily allowance of super-powered queries.
When you toggle on Pro Search (the looping X icon in the lower-left of the search box), Perplexity uses its most advanced AI models and a deeper search strategy.
Save these for when your question is complex, highly nuanced, or when a regular search isn’t quite hitting the mark. For example, if you’re trying to compare the long-term cost-effectiveness of different EV battery chemistries, a Pro Search can often provide a more detailed and structured analysis.
Other general tips
So there you have it: Your crash course in getting started with Perplexity’s free features, all framed around the fascinating world of EV battery tech.
Some other quick tips . . .
Be specific: “EV batteries” is vague. “Latest breakthroughs in EV battery recycling methods” is much better.
Use your free features strategically: The source filters, unlimited follow-ups, and daily Pro Searches are powerful tools.
Make use of the Discover and Spaces tabs: Located in the left-hand nav, Discover is a powerful news aggregator, and Spaces lets you cordon off related searches for stuff like vacation planning.
Consider a Pro plan: for $20 per month, you get more citations, file and photo uploads, unlimited Pro Searches, and a bunch of other goodies.
Go forth, explore, and may your information be ever accurate and your searches ever fruitful.
What happens when the wittiest fast food chain in the country and one of television’s sassiest characters come together? A not-so-happy meal.
Restaurant chain Wendy’s announced a forthcoming collaboration with Netflix’s Wednesday ahead of the show’s new season release. In Wendy’s disruptive fashion, the brand did not shy away from irreverent packaging and gothic names, with plans to launch a “Meal of Misfortune” on August 11.
The collaboration comes after a series of announced administrative changes at Wendy’s, a company currently valued at $2.1 billion. On July 18, the company’s CEO, Kirk Tanner, stepped down after a little over a year in the position.
Ken Cook, Wendy’s�chief financial officerwho had less than a year in that position and no previous restaurant experiencetook over as interim CEO while the board continues to look for a permanent replacement.
In addition to the C-suite changes, Wendy’s has seen positive growth in its share price, up by 4.06% the time of publishing. The uptick follows the previous day’s announcement of Pete Suerken as Wendy’s new U.S. president, who will report to the current CEO.
Online chatter has also helped the stock, with increased mentions on the popular retail investment subreddit r/wallstreetbets. The subreddit, which identifies itself as “like 4chan found a Bloomberg Terminal,” plays an outsized role in promoting so-called meme stocks.
Just this week, several stocks have seen surprising gains thanks in part to online retail investors, including a boost for retailer Kohl’s and donut maker Krispy Kreme.
‘Nothing happy about this meal’
The Wednesday Addams collaboration is set to feature various Addams-family-inspired treats.
For instance, the collab’s dips are named “You Can’t Hyde,” “This Will Sting,” “Grave Mistake,” and “Nowhere to Woe,” an ode to the character’s dark humor. The meal will also include an order of nuggets dubbed “Rest in 10-Piece,” “Cursed & Crispy” fries, and a “Raven’s Blood”�Frosty.
“This isn’t a typical collaboration, because not just any brand could scheme up a Meal of Misfortune with Wednesday Addams,” Liz Geraghty, Wendy’s International Chief Marketing Officer, said in a statement.
The meal’s packaging also boasts Addams fashion, featuring a black and purple color palette for the containers, as well as a carrier bag veiled with the fictional character’s iconic white collar and black dress combo. The phrase “there is nothing happy about this meal,” accompanies the bag’s design, an irreverent nod to the iconic Happy Meal from competitor McDonald’s.
“For a brand that’s proudly customer-obsessed and unapologetically bold, it was a match made in dark, dry-witted heaven,” Geraghty added.
Alphabet�beat Wall Street estimates for its second quarter on Wednesday, and cited massive demand for its cloud computing services as it hiked its capital spending plans for the year to about $85 billion.
The search giant beat estimates for quarterly revenue and profit on the back of new AI features and a steady digital advertising market. Google Cloud’s revenue growth surged nearly 32%, well above estimates for a 26.5% increase.
“With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures,” CEO Sundar Pichai said in an earnings release.
Shares of the company, which have risen more than 18% since its previous earnings report in April, were down 1% in extended trading.
Google had earlier pledged about $75 billion in capital spending this year, part of the more than $320 billion that Big Tech is expected to pour into building AI capabilities.
The companies have defended their aggressive AI spending amid rising competition from Chinese rivals and investor frustration with slower-than-expected payoffs, saying those massive investments are necessary to fuel growth and improve their products.
Alphabet reported total revenue of $96.43 billion for the second quarter ended June 30, compared with analysts’ average estimate of about $94 billion, according to data compiled by LSEG.
Google’s advertising revenue, which represents about three-quarters of the tech major’s overall sales, rose 10.4% to $71.34 billion in the second quarter, beating expectations for $69.47 billion, according to data from LSEG.
Deborah Sophia and Kenrick Cai, Reuters
According to McKinsey, while more than 75% of organizations now use AI in at least one business function, only 1% describe themselves as fully mature in their deploymentand most executives still dont feel confident leading it. Fluency, not just familiarity with AI, is the next big leadership gap.
Ive spent three decades guiding leadership teams, government departments, and boards through the endless waves of emerging tech. If theres one thing I know for sure, its this: Capability doesnt come from dashboards or demos. It comes from shared language, strategic alignment, and the confidence to make informed decisions.�
Many of the executive teams I have AI discussions with remain fluent in all the right buzzwords, but lack the depth of understanding to turn shiny new tech into scalable, sustainable outcomes. With AI moving from nice to necessity, its time to steer the conversation in a new direction. Heres how leaders can do it.�
1. More Talking Before Testing
AI fluency begins with conversation, not capability statements. Too often, leadership teams rush into pilots or platform demos before having the foundational discussions that guide responsible, effective use. If you want your team to lead with clarity, start by asking these questions:
Governance: How are we managing AI risk and accountability?
Customer impact: Where could AI enhance or erode trust?
Workforce: What skills do we need to build, shift, or unlearn?
IP and data: Who owns what we create? How are we protecting it?
Ethics: Are our use cases aligned with company values?
These arent nice-to-haves. Theyre essential questions, core to any organizations resilience and relevance strategy. Skip them, and you risk building tools your team doesnt understand and your clients dont trust.
2. Run Fire Drills, Not Just Workshops
AI is moving faster than most leadership teams can process. That pace creates blind spots, and blind spots turn into problems.
To stay relevant in an AI-driven world, you need a way to surface risks early. Easiest way to do that? Start with a fire drill.
Pick a scenario. Maybe your customer data is used without permission to train a public large language model. Or your chatbot starts making promises your business cant afford to keep. Then, as you would for any contingency or risk mitigation plan, ask: How would we respond?
This kind of simulation forces teams to make decisions under pressure. It reveals knowledge gaps and helps connect abstract AI risks to real world consequences. You dont need to overengineer it. A whiteboard, some honest questions, and the willingness to sit with discomfort is enough. You wont have all the answers, but you need to start probing.
3. Fluency Over FOMO
Theres mounting pressure on businesses to do something with AI. But when action is driven by FOMO, it usually results in shallow pilots, disconnected tools, or AI bolted on as an afterthought. Thats not strategy. And its certainly not sustainable. Fluency reframes the conversation.
The question isnt What can we automate? Its What problem are we solving, and is AI the best tool for the job?
Teams focused on fluency build slower, but smarter. They make better investment decisions, ask sharper vendor questions, and develop solutions that flex, scale, and last.
4. Make It Cultural, Not Just Strategic
AI capability isnt something you tack onto operations. It must be baked into the way your organization thinks and acts. That means:
Making AI literacy part of team member onboarding
Reviewing how AI influences customer experience, products, and services
Treating AI risk with the same weight as cyber risk, including shared accountability at the leadership table
Creating space in board and executive agendas for regular AI discussions
One-off strategy days wont cut it. Organizations that take AI seriously embed fluency in their culture, not just their calendar.
5. Ditch the Jargon, Lead With Questions
You dont need a PhD in machine learning to lead confidently in this space. But you do need curiosity, courage, and a commitment to ongoing learning. Start by ditching the jargon. That creates space for honest, useful conversations. Encourage reverse mentoring. Trial tools together. Normalize not having all the answers.�AI isnt the next department or the next fad. Its the new business as usual.
Leadership teams willing to sit in the unknown, learn the new language of business, and ask better questions will unlock opportunities others never see. The rest risk becoming irrelevant.
Ding-dong-ditching has resurfaced as the door kick challenge. But this time it could lead to criminal charges and potentially deadly consequences.�
In Florida this week, five minors were caught on camera participating in the challenge. Instead of simply knocking or ringing a doorbell and running, footage shows one individual approaching a front door, kicking it repeatedly, then firing an airsoft gun before fleeing the scene, according to Fox News.
Earlier this month in DeBary, near Orlando, two teenagers faced felony burglary charges after taking part in the challenge. Doorbell footage captured them sneaking up to a house, forcefully kicking the door until the wood splintered, then running away. When questioned by police, one teen reportedly said they were just being dumb, per the Daily Mail.
Similar incidents have been reported in Georgia, Louisiana, Michigan, Pennsylvania, and Texas. Police departments across these states are warning both teens and their parents about the risks involved in the challenge. Not only is it illegal, but it also raises the risk of violent confrontations between residents and those taking part.
Last month, the Fleetwood Police Department in Pennsylvania issued a warning that “While ding dong ditch has been a hallmark for decades of kids who were looking to have a little mischievous fun, todays youth have taken things to a more serious level by kicking at doors and ultimately causing damage.”
The Fort Worth Police Department in Texas released a similar statement in May. “It is imperative that individuals partaking in this trend understand that even if no burglary or theft occurs, this behavior is illegal and considered vandalism and can lead to criminal charges. More critically, it can be mistaken as an attempted break-in, potentially prompting dangerous or defensive responses from homeowners,” the department wrote.
Hot off the heels of the recent #ChromebookChallenge, police are urging parents “to speak with their children about the risks and consequences of participating in trends like this,” emphasizing that “what may seem like a prank can result in very real trouble and/or danger.”
Tesla says it has started production of a more affordable model and expects volume production in the second half of the year.
The company reported the steepest decline in quarterly revenue in more than a decade, with a 12% fall, as it battles strong competition from cheaper electric vehicles and a backlash against CEO Elon Musk’s political views.
Revenue fell to $22.5 billion for the April-June quarter from $25.50 billion a year earlier. Analysts on average were expecting revenue of $22.74 billion, according to data compiled by LSEG.
The company reported a second straight quarterly revenue drop despite rolling out a much-awaited refreshed version of its best-selling Model Y SUV that investors had hoped would rekindle demand.
Much of the company’s trillion dollar valuation hangs on its bet on its robotaxi servicea small trial of which was started in Austin, Texas, last monthand developing humanoid robots.
However, investors are worried about whether Musk will be able to give enough time and attention to Tesla after he locked horns with President Donald Trump by forming a new political party this month. He had promised weeks earlier that he would cut back on government work and focus on his companies.�
A series of high-profile executive exits, including a longtime Elon Musk confidant who oversaw sales and manufacturing in North America and Europe and left Tesla last month, is also adding to the concerns.
Akash Sriram and Abhirup Roy, Reuters
Hundreds of thousands of doses of mpox vaccine that the United States had promised to send to African nations are in danger of going to waste, dozens of congressional Democrats said in a letter to the U.S. State Department on Wednesday.
Forty-eight Democratic members of the House of Representatives, led by Representatives Mark Pocan of Wisconsin and Sara Jacobs of California, signed the letter, saying that the vaccines may expire as they sit in warehouses, wasting the U.S. taxpayer dollars that paid for them.
The letter said 800,000 doses of the vaccines are at risk, and that some 220,000 doses could be viable if the State Department begins shipping them immediately.
“This is a moral, strategic, and public health failure in the making,” the letter said.
The State Department did not immediately respond to a request for comment.
Republican U.S. President Donald Trump has made sharp cuts to foreign aid programs since beginning his second term six months ago, firing thousands of aid agency employees and contractors and throwing global humanitarian operations into chaos.
The Republican-controlled Senate and House of Representatives passed legislation this month approving Trump’s request for about $8 billion in foreign aid cuts.
Trump has said the U.S. pays disproportionately for foreign aid, and he wants other countries to shoulder more of the burden.
The World Health Organization first declared the outbreak of mpox in August 2024, when an outbreak of a new form of the disease spread from the badly-hit Democratic Republic of Congo to neighboring countries.
Uganda and Burundi also have been significantly affected.
Mpox is a viral infection that spreads through close contact and typically causes flu-like symptoms and pus-filled lesions. It is usually mild, but can be lethal.
The WHO said last month that the outbreak was still a public health emergency of international concern, its highest form of alert.
Patricia Zengerle, Reuters
U.S. stocks are rising toward�more records�on Wednesday following�a trade deal�between the worlds No. 1 and No. 4 economies, one that would lower proposed�tariffs�on Japanese imports coming to the United States.
The S&P 500 was 0.7% higher, coming off its latest all-time high. The Dow Jones Industrial Average was up 469 points, or 1.1%, with a little less than an hour remaining in trading, and the Nasdaq composite was 0.5% higher and heading for its own record.
Stocks jumped even more in Tokyo, where the Nikkei 225 rallied 3.5% after President Donald Trump announced a trade framework that would place a 15% tax on imports coming from Japan. Thats lower than the 25% rate that Trump had earlier said would kick in on Aug. 1.
Its a sign of the times that markets would cheer 15% tariffs, said Brian Jacobsen, chief economist at Annex Wealth Management. A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.
Trump has proposed stiff taxes on imports from around the world, which carry the double-edged risk of driving up inflation for U.S. households while slowing the economy. But many of Trumps tariffs are currently on pause, giving time to reach deals with other countries that could lower the tax rates. Trump also announced a trade agreement with the Philippines on Tuesday.
So far, the U.S. economy has seemed to hold up OK despite the pressures on it. And tariffs already in place may be having less of an effect than expected, at least when it comes to the prices that U.S. households are paying at the moment.
The main lesson about tariffs so far is that passthrough to consumer prices is tracking somewhat lower than in 2019, according to Goldman Sachs economist David Mericle.
Tariffs are certainly having an effect, to be sure, as big U.S. companies across industries have been demonstrating through their profit updates in recent days.
Hasbro took a $1 billion, non-cash hit to its results for the spring to write down the value of some of its assets following a review triggered by the implementation of tariffs. It said tariffs have had no impact yet on how much profit its making from each $1 of its sales, but it expects to see costs ramp during the current quarter.
Hasbros stock fell 0.8% even though it reported a stronger profit for the latest quarter than analysts expected, when not including the $1 billion charge.
Like the toymaker, Texas Instruments stock also fell despite delivering results for the latest quarter that were above analysts expectations. It gave a forecasted range for profit in the current quarter whose midpoint fell a bit shy of Wall Streets.
Analysts pointed to some cautious commentary from Texas Instruments executives about how the uncertainty created by tariffs could slow demand. Its stock sank 13.4%.
Most of the stocks on Wall Street nevertheless rose, including a 14.2% jump for GE Vernova’s stock. The energy company not only delivered a stronger profit than analysts expected, it also raised its forecasts for revenue from its power and electrification businesses.
GE Vernova said that the inflation its expecting to see as a result of tariffs may be trending toward the lower end of $300 million to $400 million, net of mitigating actions.
Lamb Weston rallied 15.3% after the supplier of French fries and other potato products delivered better results for the latest quarter than analysts expected and said it expects customers will continue to eat fries even with an uncertain economy. It also announced a plan to cut at least $250 million in costs by cutting about 4% of its workforce and making other moves.
Elsewhere on Wall Street, several stocks jumped as traders search for the next meme stock that could ride a wave of online enthusiasm to high prices, regardless of what the companys profits are doing. Krispy Kreme, which came into the day with a 58.4% loss for the year so far, jumped nearly 39% shortly after trading began. It gave back most of those gains as the day continued and was up 4.6% in afternoon trading. GoPro gained 12.4%.
Thats even as other potential meme stocks lost their momentum. Opendoor Technologies, which had more than tripled between the last two Mondays, fell 17%.
In stock markets abroad, indexes rose across Asia and Europe following Trumps announcements of trade deals.
Japans market was the big winner, where a series of automakers gave no public reaction as their stock prices rallied. Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind.
Elsewhere, Hong Kongs Hang Seng rose 1.6%, and Frances CAC 40 gained 1.4% for two of the worlds bigger moves.
In the bond market, Treasury yields ticked higher.
The yield on the 10-year Treasury rose to 4.38% from 4.35% late Tuesday.
Stan Choe, AP business writer
AP Business Writer Yuri Kageyama contributed.
Tokenization has long been a buzzword for crypto enthusiasts, who have been arguing for years that blockchain-based assets will change the underlying infrastructure of financial markets.
The technology is seen as rapidly increasing in coming years, especially in the U.S., helped by the passage of three new bills. President Donald Trump’s administration has eased regulation of the broader cryptocurrency industry, paving the way for a boom in the valuation of companies in the sector and the rapid growth of crypto-related securities.
However, the growth of the market for tokenized assets has been far slower than expected in recent years, with many projects still in their infancy or not yet live.
How does tokenization work?
The term “tokenization” is used in a variety of ways. But it generally refers to the process of turning financial assetssuch as bank deposits, stocks, bonds, funds, and even real estateinto crypto assets.
This means creating a record on a digital ledger blockchain that represents the original asset. These blockchain-based assets, or “tokens,” can be held in crypto wallets and traded on the blockchain, just like cryptocurrencies.
Where do stablecoins come in?
Stablecoins can be seen as an example of tokenization. They are a type of cryptocurrency designed to maintain a constant value by being pegged to a real-world currency, typically the U.S. dollar. The issuer holds one U.S. dollar in reserve for every dollar-pegged crypto token it creates.
Stablecoins are blockchain-based tokens acting as a proxy for an asset that already exists outside the blockchain.
They allow people to move money across borders without interacting with the banking system. While critics say that this makes them useful for criminals who want to avoid banks’ anti-money-laundering checks, stablecoin issuers say that they are a lifeline for people in countries without a developed payments system.
Are tokenized assets taking off?
Yes and no. Stablecoins have grown in recent years, with the market estimated to be worth about $256 billion, according to crypto data provider CoinMarketCap, and expected to touch $2 trillion by 2028, according to Standard Chartered.
But banks have talked for years about creating tokenized versions of other types of assetswhich they say will make trading more efficient, faster, and cheaperand those “tokens” have struggled to gain traction.
While there have been individual issuances, there is not a liquid secondary market for these kinds of assets.
One impediment to trading traditional assets via blockchain is that banks are working on their own private networks, making it difficult to trade across platforms.
What are the pros of tokenization?
Some proponents of the crypto industry have said tokenization can improve liquidity in the financial system. Illiquid assets like real estate could be traded more easily if they are broken up into small digital tokens.
It is also expected to improve access to asset classes that are typically out of reach of smaller investors by creating a cheaper entry point.
Which companies are interested in tokenization?
Some major global banks, including Bank of America and Citi, have said they could explore launching tokenized assets, including stablecoins.
Asset manager BlackRock is also doubling down on the tokenization boom, and has highlighted its ambition of becoming the largest cryptocurrency manager in the world by 2030.
Coinbase, the largest U.S. crypto exchange, is seeking permission from the Securities and Exchange Commission to offer “tokenized equities” to its customers.
How does new regulation help tokenization?
Since stablecoins themselves are tokens and seen as one of the biggest drivers of the growth of tokenization, the new stablecoin law will end up boosting the proliferation of tokenization, experts say.
The new market structure bill, known as the Clarity Act, is expected to establish a clear framework that could enable stablecoins and other crypto tokens to become more widely used.
What are the risks?
Some analysts say the hype around tokenization might be premature and caution that the rapidly growing crypto ecosystem could experience near-term turbulence due to the potential risks of a big decline in prices.
European Central Bank President Christine Lagarde has warned that stablecoins pose risks for monetary policy and financial stability.
Some critics of the industry warn that the frenzy around the new technology could introduce new systemic risks, especially in the absence of stringent regulation. They also say there is no reason why the blockchain should be any more efficient than the electronic ledgers and trading systems already used in financial markets.
Buyers of third-party tokens, which are issued by unaffiliated third partiessuch as crypto exchange Krakenthat have custody of securities, could be exposed to counterparty risks, and regulators are sounding notes of caution.
Earlier in July, Hester Peirce, a commissioner at the Securities and Exchange Commission who has frequently spoken positively about cryptocurrency, said tokenized securities would not be able to circumvent existing securities laws.
More than half of the world’s U.S. dollar stablecoins are issued by a single company, Tether, which says it manages $160 billion in reserves, but has not undergone a financial audit.
By Anirban Sen, Reuters
Additional reporting by Chris Prentice and Elizabeth Howcroft.
If youre planning to roast smores over a campfire this summer, youll be spending more than last year on one ingredient that you cannot skip.
Hershey plans to raise prices on its products to offset the cost of cocoa, a commodity thats been on a pricing roller coaster of its own over the last two years.
CBS News reports that the company will introduce a low double-digit increase in prices across its products. Hershey owns many of the most popular candy brands in the U.S., including Reeses, Kit Kat, and York, as well as non-chocolate candies like Twizzlers and Jolly Rancher. The price hike will likely go into effect within 90 days, though that timeline may vary.
Last year, the price of cocoa hit historical highs, soaring past $10,000 per metric ton. Cocoa prices began spiking at the beginning of 2024, doubling over the course of the year and tripling since late 2023. Over the last month, cocoa dipped well below its record highs, but it still costs more than twice as much as it did two years ago.
Cocoa powder, used to make chocolate, comes from the seeds of the cacao tree, a water-intensive plant grown in tropical parts of Africa and South America. West Africa accounts for three-quarters of the worlds cocoa supply, with the Ivory Coast and Ghana being the worlds top two cocoa-exporting nations.
With the global appetite for chocolate relying on a single region in Africa, cocoa is relatively vulnerable to forces outside of farmers controlparticularly climate-caused weather events that are worsening as the planet warms. The climate crisis is expected to cause accelerating agricultural losses for staple crops like corn and wheat around the globe, and cocoa is no different.�
Excessive rainfall in late 2023 caused cacao pods to rot, one factor that sent the price of the commodity sky-high. Intense heat is also taking its toll on cocoa farming, and cacao trees can struggle to produce pods when temperatures stretch above the plants ideal range for days on end.
Less production means higher prices, though those effects might not have been fully felt by consumers right away. Pricing has yet to pick up meaningfully, but we expect this to accelerate potentially to the low teens in 2025, Celine Pannuti, head of J.P. Morgans European Staples and Beverages team, said in a late 2024 report on the cocoa crunch. We see the chocolate market set for inflation largely unprecedented in recent history.
Chocolate in a changing economy
Hershey says that its planned price increase isnt related to tariffs, but the company has identified tariffs as a threat to its business before. Cocoa cant be grown in the U.S. and must be imported, making it vulnerable not only to a changing climate but also to the whims of a president keen to inject chaos into global trade.
In May, Hershey was pursuing an exemption with the Trump administration that would allow the company to import its key ingredient without taking on new costs associated with tariffs. In an earnings call, the company estimated that Trumps tariffs would cost it between $15 and $20 million in the second quarter of the year. Absent tariff relief, this expense is expected to increase in the third quarter as we work through inventory on hand, Hershey CFO Steve Voskuil said on the call.�
Given that Hersheys prices will increase, the company likely did not secure an exemption for its cocoa importsparticularly since any conversation with Trump would likely come with threats against raising prices. Fast Company has reached out to Hershey for an update on its pursuit of a tariff exemption for its cocoa imports.
As a largely domestic food producer, we are relatively less exposed to tariffs than other industries, Hershey CEO Michele Buck said in May. That said, the current U.S. levy on cocoa is an exposure that we must manage on top of the cocoa markets unprecedented recent price swings.
Cocoa might be more expensive now, but Hershey is optimistic about the future, noting in its last earnings call that cocoa supplies from the worlds top three suppliers should be up by 20%. The spike in cocoa prices also led to a flurry of cocoa farming investment, a move that could improve yields in the future.
There are reasons to believe that this years crop marks the beginning of a multiyear growth cycle in cocoa supply, Buck said. In the meantime, global end users are now responding to persistently high prices in earnest, having waited and watched for some time.
