The Hershey Co. Shares Growth Strategies

HERSHEYDuring a media day with trade press editors on Sept. 4, executives from The Hershey Co. revealed its plans and strategies for “disciplined, sustainable growth” over the next 20 years.

The Hershey Co. aims to maintain the No. 1 market share in North America, and to be among the top three in emerging markets, such as China. It continues to focus on emerging markets with a rising middle class. Its focus is also convenience-oriented and covers the snacking continuum that ranges from better-for-you to indulgence products. While it is placing its biggest priority on contiguous North America and China, it is also looking to expand in Brazil, India, Middle East/North Africa and Southeast Asia.

To reach these goals The Hershey Co. is focused on delivering customer and shopper solutions through insights and knowledge, said Michele Buck, president of North America for The Hershey Co. She noted the company aims to grow sales from $6.6 billion in 2012 to $10 billion in 2017.

To reach its goals Hershey is focused on five growth strategies:

•Deliver a sustainable North American business

•Expand the geographic footprint in markets of focus

• Create and grow a consumer centric portfolio

• Win with talent using knowledge and insights

• Execute with excellence

Buck noted Hershey is competing in an “advantage category” that is highly impulsive, has channel ubiquity, expandable consumption and is recession resistant. The company also has an advantage business model with iconic brands, proprietary insights and tools, and strong retail executive that ensures programs are executed to the max.

Chuck Raup, vice president of U.S. Sweets & Refreshment, noted the company is driving its non-chocolate items, with Twizzlers, BreathSavers, Icebreakers and Jolly Rancher by investing in core advertising and merchandising, growing usage occasions and extending to meet new consumer needs. Raup noted Hershey is outpacing the mints category, and is cross promoting its BreathSavers with coffee and Icebreakers with sandwiches.

After launching Twizzlers and Jolly Rancher bites in January 2013, the company plans to roll out a new king-sized version of the products in December that fits in a car cup holder and is resealable. It’s also debuting a Jolly Rancher stick pack this December that fits easily in a pocket for convenient snacking.

In January 2012, The Hershey Co. acquired Brookside, which features superfruit flavors—such as goji, pomegranate and acai—coated in dark chocolate. Jenn Podhasky, vice president of the U.S. Chocolate noted the product has risen from the No. 9 slot to the No. 5 dark chocolate brand since January, and she forecasted that it could reach the No. 2 or No. 3 spot next year. This September Hershey is launching the Brookside impulse pack in convenience stores, as well as a family pack in the food/mass/drug channels in the second quarter of 2014.

Podhasky noted that Kit Kat Minis, which launched in May, are doing extremely well. The overall “hand-to-mouth” category (including bites, drops and minis) has been up considerably for Hershey’s in 2013 compared to 2010, with Reese’s Minis and Kit Kat Mini’s leading the pack.

The Hershey Co. is also giving increased attention to seasonal items, noting seasonal celebrations is 20% of its business. The company has seen great success around its S’mores occasion—which centers around food/friends/family and campfires—and has totaled $130 million in sales. Summer, Halloween and Holiday candy sales are on the rise and continue to be a major focus for the company.

After Easter 2014, Hershey is debuting an updated bag of Hershey’s miniatures with new candy wrapper designs to grow excitement.

The 2013 Harris Poll EquiTrend named Reese’s Peanut Butter Cups No. 1 in the chocolate candy category, and The Hershey Co. is expanding on its Reese’s success by relaunching its Reese’s Nutrageous bar, with TV promotions beginning in January 2014.

With its Hershey Kisses line, the company is pulling back from the influx of limited edition items of years past and focusing on its core flavors: caramel, milk chocolate, cookies & crème and almond.   

Executives from Hershey also led editors on a tour of its Global Customer Insights Center, a retail innovation center where Hershey develops ideas in collaboration with its retail partners, using video displays and life size store set ups to brainstorm ways to drive business in the category at retail—from innovative displays to eye catching cross promotional opportunities.

  • http://www.BradReese.Com/ Brad Reese

    According to Advertising Age and Euromonitor International, Reese’s had 2012 sales of $2.679 billion, with only $76 million of that coming from outside the United States.

    How many billions in new Hershey shareholder wealth creation is Bert Alfonso giving up by refusing to promote and/or market Reese’s, the #1 selling candy brand in the United States (amazingly Reese’s is ranked 4th globally in 2012 with only $76 million sold outside the United States)?

    Interestingly, the Hershey’s brand is NOT even listed on the Advertising Age and Euromonitor International 2011 and 2012 charts for either the United States or Globally.

    By comparison, the Mars Snickers brand had 2012 sales outside the United States of $1.552 billion!

    For an example of the Hershey Company’s squandering of the Reese’s brand, visit Hershey’s Chocolate World and see for yourself how the merchandising of the Reese’s brand has become totally pathetic.

    Sincerely,

    Brad Reese

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