HERSHEY, PA. — A key component of The Hershey Co.’s strategy in fiscal 2013 is the introduction of Brookside Foods products to a broader audience in North America.
Hershey acquired Brookside Foods in December 2011. The business unit is a manufacturer of chocolate covered nuts and dried fruit.
“We continue to feel very good about the direction of our core U.S. business as we are bringing innovative news, variety and excitement to the category,” said JP Bilbrey, president and chief executive officer, in a conference call with securities analysts on Jan. 31. “I'm also excited about the broader launch of the Brookside products into the FDMx channels. Brookside has increased sales at a compound annual growth rate of about 20% over the last several years. With our additional manufacturing capacity now online, Brookside 2013 net sales growth will exceed this historical CAGR.
“Three s.k.u.s (stock-keeping units) and a stand-up 7-oz re-sealable pouch began shipping to retailers a few weeks ago. Our research indicates strong appeal among many of the consumers identified within our confectionery demand landscape. Therefore, we believe Brookside will attract new consumers to the confectionery category by focusing on unmet consumer needs.”
At the time The Hershey Co. acquired Brookside Foods, the business unit’s products were available nationally across Canada and in Costco stores in the United States.
“We would expect it to really be in all the channels where our products are today with the exception early on of convenience, where we haven’t yet built up the packaging we think will be appropriate,” Mr. Bilbrey said. “Although we certainly plan to do that because we think it’s a great on-the-go product (and) you would expect it to look very similar to the balance of our line in 2013 and beyond.”
Hershey plans to put significant marketing muscle behind the Brookside brand in 2013. It has increased its advertising and promotion budget 20% compared to fiscal 2012.
“A lot of the increases you’re seeing is because Brookside is a big brand and it’s now going to be advertised,” Mr. Bilbrey said.