Dive Brief:
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Hershey is introducing two plant-based confections to the market. Made with oats, the new products are the storied confectioner’s first permanent offerings in the category, the Pennsylvania company said in a statement.
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The sweets and snacking giant will begin selling Reese’s Plant Based Peanut Butter Cups in March and Hershey’s Plant Based Extra Creamy with Almonds and Sea Salt bars in April.
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These plant-based confections are not Hershey’s first foray into the space. In 2021, it started trialing a plant-based chocolate bar in select markets called Hershey’s Oat Made. It was available through June 2022. Hershey did not say if or how the new bar and the earlier test version are different.
Dive Insight:
Hershey hinted last summer it might be making a bigger play for plant-based sweets. It applied for a patent on a method of using roasted grain flour — made from rice, wheat, oats, corn, sorghum or millet — as a substitute for milk in a dairy-free alternative to milk chocolate.
Similar to other plant-based products such as meat and milk, it’s been a challenge across to find the right ingredients and processes to make a candy that adequately mimics milk chocolate in taste, texture and mouthfeel.
Still, plant-based chocolate could become a huge category as consumers look to eat healthier and reduce their environmental footprint. Hershey has focused more attention in recent years on innovating several of its core brands to address consumer needs, rolling out smaller portions, no sugar added, zero sugar, high protein and now plant-based options.
When it comes to sweets, sugary indulgences will likely always command the lion’s share of Hershey’s revenue in the category. But with more consumers turning to smaller, but rapidly growing niche categories, such as plant-based or low sugar, it makes sense for Hershey and other companies to have a presence in those spaces with some of their top brands.
While six in 10 consumers ages 18 to 44 expect each food brand to have plant-based options, only 45% of them are satisfied with current plant-based chocolate offerings, according to a 2021 survey done by chocolate ingredients giant Barry Callebaut. Abillion, a plant-based online community, estimated that plant-based chocolate alone represents 40% of the world’s vegan confectionery market and is worth $1 billion.
It’s one thing for a company to introduce a new brand, but another to roll out plant-based offerings of existing products. In the case of Hershey, it has valuable brand equity it can tap into when introducing the plant-based Reese’s and Hershey’s to give the new products instant recognition in the marketplace.
The challenge is most consumers are familiar with how the brands are supposed to taste, look and feel. A failure to at least come close to replicating what consumers expect in these brands could hurt the plant-based offerings and potentially damage the brand’s overall reputation.
Hershey will be joining a small but growing number of big confectioners in the plant-based chocolate space.
Mars was the first large mainstream confectionery brand in the space with a vegan version of its Galaxy bar that launched in the U.K. in late 2019. Last summer, it debuted a milk chocolate bar called CO2Coa featuring animal-free dairy proteins developed in collaboration with Perfect Day.
Nestlé, which makes KitKats in most countries except the U.S., launched the plant-based KitKat V in 2021. Following a test launch in the United Kingdom and some other countries, the world’s largest food maker said last year it would expand the vegan KitKat’s sales footprint to other countries across Europe. (Hershey has the rights to manufacture Kit Kat in the U.S.)
High-end chocolate maker Lindt got into the dairy-free space in 2022 with oat milk chocolates.
