Milling & Baking News Corporate Profiles - 2019 - 82

COMPANY OVERVIEW

The Hershey Co.
Investing in core brands to maintain category leadership
he Hershey Co. is balancing innovation in
its core brands with exploration into new
categories and business models.
The core confection brands remain the engine that drives the business, and the Hershey,
Pa.-based company is taking steps to maintain
its status atop the U.S. chocolate candy market. The company made several investments
in its legacy brands this year, introducing new
brand extensions to two of its most popular
candies.
"I think frequently the best and more sustainable innovation we've had is when we are
really focused on either improving our core or
staying close to the core with a key, purposeful
benefit," said Michele G. Buck, president and
chief executive officer.
The company launched three new versions
of its Reese's Peanut Butter Cups, beginning
with Reese's Thins. The cups are 40% thinner
and contain less chocolate and peanut butter
than the original candy. This was followed by
the Reese's Lovers promotion in the second
quarter, which featured a Reese's Chocolate
Lovers cup with more milk chocolate and
Reese's Peanut Butter Lovers with more peanut butter. Kit Kat Duos Mint + Dark Chocolate, the first new Kit Kat flavor in over a

decade, is set to launch in December.
"One of the interesting things about Reese's
is we have all different kinds of cups and different shapes and different ratios of chocolate
to peanut butter," Ms. Buck said. "Thins offers a
benefit of permissibility and a totally different
eating experience on our biggest core brand.
That proximity to the core tends to lead to a
more sustainable approach."
Hershey also reinforced its agile pricing
strategy with a series of price increases on its
confection instant consumables business, which
accounts for one-third of overall sales, as well
as on bagged candies, gums and mints. The
adjustments helped fuel brand-building initiatives, with smaller brands like Almond Joy, York
and Heath benefiting from increased investments in advertising.
Improving exposure to consumers through ecommerce and social media is a key focus for
the company, Ms. Buck said.

"Having more brands in our portfolio stay
relevant with our consumers and growing is
critical to our overall category leadership,"
she said.
Hershey's continuing experimentation with
new categories and business models to further expand its snacking reach follows last
year's $1.6 billion acquisition of Amplify Snack
Brands, Inc. The transaction, which was the
largest in the company's history, included the
SkinnyPop, Paqui and Oatmega brands.
In August, Hershey announced minority investments in two emerging snacking
businesses: FULFIL Holdings Ltd. and Blue
Stripes L.L.C. Dublin-based FULFIL manufactures vitamin-fortified, high-protein nutrition
bars in the U.K. and Ireland. New York-based
Blue Stripes Cacao Shop is a restaurant that
showcases cacao pulp in a range of offerings.
In September, Hershey acquired nutrition bar
maker One Brands, L.L.C. for $397 million.
"Successful companies evolve and engage
consumers in new and different ways," said
Mary Beth West, chief growth officer. "This includes new platforms through R.&D., strategic
acquisitions and investments in businesses that
are sitting at the cross section of new consumer
snacking needs." CP

Chief executive officer -
Michele G. Buck

Hershey Co. net income

Hershey Co. net sales

Hershey Co. share price

per share
$162

$720

2016

82 \ November 2019

$783

2017

$1,178

2018

in millions

$146
$130

$7,440

$7,515

$7,791
$114

2016

2017

2018

$98
Oct.
2018

Dec.

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Milling & Baking News Corporate Profiles - 2019

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