Food Business News - May 3, 2016 - (Page 22)

Hershey still seeking answers to slow growth PAULA LOVES RED SWEETS, HER PARENTS WANT TO KNOW WHAT MAKES IT SO APPEALING Your consumers are increasingly informed HIV\[[OLJSHPTZILULÄ[ZHUKPUNYLKPLU[Z of your sweets. They also want to know ^OLYLP[JVTLZMYVTHUKOV^P[HɈLJ[Z their child's health. You can count on us to help you answer their questions correctly. GO TO for a consult with a specialist GROWING COLOURS 22 FOODBUSINESS NEWS ® HERSHEY, PA. - Executives with The Hershey Co. were somewhat simultaneously guarded and optimistic during a conference call on April 26 with financial analysts. They noted that slower-than-expected growth in North America during the first quarter prompted the company to lower its guidance for the rest of the fiscal year, but hinted it may not be that bad in the end. " ... What I would tell you is that as we look at the marketplace, and what we see is happening Q1, that we're being prudent in the comments that we're making," said John P. "J.P." Bilbrey, chairman, president and chief executive officer. "We're optimistic within our plan, that we always want to grow share ahead of the market, and that's what we're going to be challenged with." Hershey's net income for the first quarter ended April 3 totaled $229,832,000, equal to $1.09 per share on the common stock, and a decline compared with the first quarter of the previous year when net income was $244,737,000, or $1.14 per share. Sales for the quarter fell approximately 5.6% to $1,828,812,000. Full year net sales are expected to increase 2%, according to the company, as opposed to the previous estimate of 3% due to lowerthan-expected non-seasonal candy, mint and gum growth over the remainder of the year. What gives Mr. Bilbrey optimism about the rest of the year is he sees some of the headwinds the company has experienced the past few quarters to be short term versus structural. "I think one of the events that makes this current period of time unique is the amount of choice that there is in the market relative to what I think we have historically seen," he said. "That means the trial has moved around a lot." He noted that uncertainty related to the economy and shifting consumer trends with a focus on transparency has challenged such manufacturers as Hershey. "But as I take a step back and just look at the overall industry, as well as the category that we compete in, I think many of the things that are happening are far more cyclical than I would think about them as structural," he said. To offset some of the short-term challenges, the company announced it has raised its annual savings target from continuous improvement and productivity programs from approximately $50 million per year to $70 million to $100 million per year for the next three years starting in 2017. The company also acquired barkTHINS, Congers, N.Y., a manufacturer of Fair Trade, Global net sales of The Hershey Co. in billions 2015 $7.39 2014 $7.42 2013 $7.15 2012 $6.64 2011 $6.08 2010 $5.67 2009 $5.30 2008 $5.13 2007 $4.95 2006 $4.94 Source: The Hershey Co. Non-GMO Project Verified chocolate-based snacks for an undisclosed amount. In 2016, barkTHINS is forecast to generate sales in the range of $65 million to $75 million. "This acquisition builds on our snack strategy, and complements our strong core confectionery portfolio, the heart of our company," Mr. Bilbrey said. "And it adds strength and diversification to our offerings that allows Hershey to satisfy more consumer needs." The acquisition of barkTHINS builds around a concept Mr. Bilbrey called "snackfection." "Confectionery is at the core of who we are and what we do," he said. "What we've seen as we've continued to do some demand landscape work is there's an interesting area around what we call 'snackfection.' And if you look at, some of our recent - like the Reese's Mix and Bites products, those have been terrific for us. They don't show up in our market share, because they are actually captured in snacks, but we're very May 3, 2016

Table of Contents for the Digital Edition of Food Business News - May 3, 2016

Food Business News - May 3, 2016
Dr Pepper pivoting with the consumer
New front opens in the battle over sodium
Beverage Business News - Beverage makers capitalizing on dairy
Table of Contents
Web Contents
Editorial - Vermont’s immediate impact is becoming clearer
Three meals a day still the American way
Mondelez battling weakness in biscuit market
Pinnacle picks Mondelez exec as new c.e.o.
Chipotle Mexican Grill in the midst of a slow recovery
Hormel sells Diamond Crystal Brands
Starbucks sets forth single-serve strategy
PepsiCo initiating transformational innovation agenda
McCormick acquires Australian herbs company
Costco eyes Nebraska for new poultry plant
Hershey still seeking answers to slow growth
Nestle, R&R to create world’s third largest ice cream company
Saputo details succession plan for presidency
Papa John’s removes HFCS from menu
Danone building strength in yogurt
Dannon to go non-G.M.O.
Taco Bell to limit antibiotics in chicken
Dr. Praeger’s focused on keeping brand fresh
PepsiCo appoints new global food service leader
NatureBox moves from snail mail to retail
Market Insight - The good and bad of El Nino, La Nina
Ingredient Trends - Clean label gains momentum
Food packaging and clean label
Ingredient Innovations - Red means go in color innovation
Specialty dairy ingredients used in beverages
New Food Products
Ingredient Market Trends - I.G.C. forecasts world wheat stocks at new record in 2016-17
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - May 3, 2016