Innovation and expansion lead Hershey growth strategy
BOCA RATON, FLA. — Strategic innovation and global expansion drive The Hershey Co.’s plan to become a $10 billion company by 2017.
“Our plan builds off the insights-driven, consumer-centric business approach we built in 2008 but takes it to the next level,” said Michele Buck, senior vice-president and chief growth officer, at the Consumer Analyst Group of New York conference taking place this week. “We will expand five core brands globally, led by our $1 billion-plus chocolate brands in Hershey’s, Reese’s, the iconic Kisses brands, along with our scale, sweets and refreshment brands, Jolly Rancher’s and Ice Breakers, as we selectively build out our portfolio in other on-trend segments.”
The company looks to drive brand momentum in the United States through robust advertising and core innovation.
“The inherent advantages of our category in terms of impulsivity, expandable consumption and advertising responsiveness make advertising a particularly impactful growth lever for us,” Ms. Buck said.
At the heart of the company’s core brand launches are recent introductions of Twizzlers Bites and Jolly Rancher Bites and a June rollout of Kit Kat Minis.
“These innovations further extend the hand-to-mouth platform across our portfolio following the success of Reese’s Minis, Hershey’s Drops and Rolo Minis in recent years,” Ms. Buck said.
Creating usage occasions remains another growth strategy.
“We’ll expand our seasons business in 2013, as we combine our three power-summer items into one big summer celebration, leveraging S’mores around summer barbecues, Twizzlers, a favorite for the beach and summer road trips, and syrup usage that peaks in the summer, moving beyond milk consumption to also include seasonal ice cream usage,” Ms. Buck said.
The company also aims to broaden availability of its recently acquired Brookside Foods in 2013 with doubled plant capacity.
“Brookside, the company we acquired in 2012, has exceeded expectations, up 24% in 2012,” Ms. Buck said. “Brookside makes wonderful dark chocolate pieces, featuring unique exotic fruit flavors. This is an addition to our portfolio that has significant growth potential.”
China represents a key growth engine as part of the company’s global expansion initiative.
“We’re placing a big bet in China and anticipate it will be Hershey’s No. 2 market, behind only the U.S. in the coming five years,” Ms. Buck said.
To better reach the market, the company has tailored its packaging and expanded seasonal offerings, such as for the Chinese New Year.
“We believe the outlined strategy will ensure that Hershey continues to deliver predictable growth based on our strong North America foundation, a replicable business model and aggressive yet disciplined expansion,” Ms. Buck said. “Strong top-line results coupled with our ongoing cost management will deliver bottom-line performance. I’m optimistic about our future and the value to be created, as we continue to unleash our company’s full potential.”