Supplier insights: three reasons why Hershey is planning for a stronger 2021

Date : 30 April 2021

Stewart Samuel

Program Director - Canada

Following a strong first quarter, with consolidated net sales up 12.7%, Hershey has raised its outlook for the full financial year. Having initially forecast sales growth of 2-4%, it now expects growth of 4-6%.

Source: IGD Research

1. New at-home behaviours are forming new traditions

Families continue to embrace the at-home lifestyle, with its brands central to game and movie nights, seasonal celebrations and home baking. Its consumers value some of the new traditions that they’ve created this past year, and they intend to continue them in the future even when the pandemic ends. For example, 43% of parents are having more movie nights this year compared to last, and 36% claim that they will increase movie nights in the coming months. Others have pointed to the greater enjoyment from backyard Easter egg hunts, compared to community events, a new tradition which is set to continue.

2. Strengths in at-home and away-from-home businesses

Its away-from-home business performed better than expected as consumer mobility improved in the US. This was underpinned by the vaccine roll-out and stimulus payments. Hershey will focus on its confection and better-for-you snack packs, foodservice business and single-serve products to capitalise on the improving trend. The company described the current trading environment as relatively unique, given the strengths it is seeing away-from-home and at-home. While this is unlikely to remain the case going forward, it does create a major window of opportunity.

3. Increased product distribution opportunities

Hershey has been able to capitalise on the competitive environment to capture incremental merchandising and distribution opportunities. In Q1, it gained approximately five new everyday items through front-end strategies like queuing and take-home aisle space optimisation. Its ability during the early stages of the crisis last year to maintain product supply (which secured additional space in 2020) has been a key factor in enabling the increased distribution gains this year.

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