Hershey strives toward sustainability, growth via portfolio expansion

by Max Sosland
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Hershey - Brookside Fruit & Nut Bars, snack mixes, snack bites
Hershey recently introduced Brookside fruit and nut bars, Hershey’s, Payday and Mr. Goodbar snack bites, and Hershey’s and Reese’s snack mixes.

HERSHEY, PA. — Recognized by the Advantage Report for the Convenience Channel as the top overall “Fast Moving Consumer Goods” manufacturer in 2015, The Hershey Co. continues to make progress toward addressing changing consumer preferences and trends, according to the company’s 2015 Corporate Social Responsibility (C.S.R.) Report. The company has progressed by expanding its portfolio via key acquisitions, the reorganization of the executive leadership and its growing presence in global markets. Hershey also has made substantial steps toward establishing sources with greater sustainability and responsibility. The company believes the changes will enhance global growth and address changing consumer needs.

Hershey described in the report the need to focus on consumers’ preference toward wholesome choices and convenient sources of protein. To address this growing trend, the company acquired Krave Pure Foods, Inc. in 2015, a leading jerky brand. Jerky is described as “the fastest-growing subsegment” of the meat snacks category in the United States in the report.

Krave Jerky varieties, Hershey
To address the demand for convenient sources of protein, Hershey acquired Krave in 2015.

In addition to launching Krave jerky into select U.S. and global markets, Hershey introduced many other snack products into these markets. These snacks include Brookside fruit and nut bars, Hershey’s, Payday and Mr. Goodbar snack bites, and Hershey’s and Reese’s snack mixes.

To expand its portfolio even further, Hershey introduced global products within the United States. Hershey’s Kisses Deluxe Chocolates, which premiered in China, were launched in the United States, Mexico and Canada in late 2015. The company also began planning for SoFit, a soy beverage brand originally developed in India, to launch in select U.S. markets in 2016. The U.S. brand of SoFit includes a number of snack products with plant-based protein, aiming to cater to consumers’ recent preference toward wholesome protein “on the go.” Hershey also completed the integration of The Allan Candy Co. Ltd., which Hershey acquired in 2014, launching its Big Foot Candy in the United States.

Hershey's Kisses Deluxe
Hershey launched its Hershey's Kisses Deluxe Chocolates, which premiered in China, in the United States, Mexico and Canada in late 2015.

To complement the portfolio expansion and increase its global presence, in 2015 Hershey created the position of global chief sales officer and hired sales veteran Rob Gehring. He joined Hershey from Coca-Cola, where he was president of the Wal-Mart Global Team.

“I’m delighted to be building upon Hershey’s long legacy of retail leadership,” Mr. Gehring said. “By proactively engaging with retail customers and sharing our market insights, we are helping them adapt to changing consumer shopping habits and to implement innovative sales strategies.”

Mr. Gehring is tasked with leading the company’s global sales strategy with a focus on snacks portfolio expansion.

Rob Gehring, Hershey
In 2015, Hershey created the position of global chief sales officer and hired sales veteran Rob Gehring.

Global expansion has been a main focus of Hershey, expanding its portfolio in markets across the world. In China, Hershey developed both Hershey’s Kisses DIY gift box and wedding box for purchase on-line. The company is aiming to take advantage of both the large on-line shopping and wedding markets in China. According to the C.S.R. report, 500 to 1,000 boxes may be purchased as gifts for guests. Hershey also is focused on strengthening confection and snack brands already established, such as introducing new protein-based snacks to its instant consumable bean curd products.

Hershey also has seen recent success in India. The success may be attributed to its exiting of the edible oils business and subsequent brand marketing programs for brands such as SoFit, Hershey’s Syrup and Jolly Rancher. Since dropping edible oils, Hershey India has experienced two straight years of  growth within its confectionery and beverage businesses in 2015, according to the report.

Hershey CocoaAction cocoa farm
In 2014, Hershey became a founding member of CocoaAction, an organization focused on improving the sustainability of the cocoa industry in Africa, as well as improving the livelihoods of cocoa farmers.

In addition to portfolio expansion, Hershey emphasized its goal to improve sourcing responsibility in the C.S.R. report. In 2014, Hershey became a founding member of CocoaAction, an organization focused on improving the sustainability of the cocoa industry in Africa, as well as improving the livelihoods of cocoa farmers. CocoaAction uses the power of public-private partnerships to increase the potential ability of individual organizations to rejuvenate the cocoa sector to become economically viable and sustainable. Its effectiveness will be measured through performance indicators, agreed upon by the companies and producing-country governments, according to Hershey. The aggregate progress would be publicly reported on a regular basis.

To address the issue of certified and sustainable cocoa production, Hershey announced in 2012 its commitment to purchase 100% certified and sustainable cocoa by 2020. In order to achieve the objective set out then, the cocoa would be verified by independent auditors in order to ensure that high international standards are met. By the end of 2015, 50% of Hershey’s cocoa use was certified by these independent auditors, one year ahead of its 2016 target.

Terry O'Day, Hershey
Terry O’Day, senior vice-president and chief supply chain officer for Hershey

“In just three years, we have made remarkable progress toward our goal of sourcing 100% of our cocoa supply from certified and sustainable cocoa farms by 2020,” said Terry O’Day, senior vice-president and chief supply chain officer.

The report also describes Hershey’s efforts to restore Mexican cocoa farming sustainability after hundreds of cocoa farms were devastated by tree disease in southern Mexico over a decade ago. In 2012, Hershey launched its Mexico Cocoa Project to revitalize cocoa farming in the region. One of the project’s notable objectives is to assist farmers in achieving certification for sustainable cocoa, among other objectives. The project made significant progress in this regard in 2015 as it was inspected and approved by one of the certification auditors, meeting the auditor’s updated baseline assessment requirements for certified sustainable cocoa.
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