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Best known for its iconic confections, Hershey hits its stride in salty snacks

Best known for its iconic confections, Hershey hits its stride in salty snacks
Best known for its iconic confections, Hershey hits its stride in salty snacks


As Kristen Riggs makes her way to her office at Hershey each day, she is reminded of the company’s storied roots in sweets: The street lamps have giant Hershey Kisses covering the light bulbs and the roads are adorned with names, such as Chocolate Avenue and Cocoa Avenue. Her office is in the original factory that founder Milton Hershey completed in 1905.

But as the president of the 129-year-old company’s fast-growing salty snacks division, Riggs focuses her attention toward pretzels, puffs and popcorn as she tries to replicate the success Hershey has achieved with its iconic sweet brands, such as Reese’s and chocolate bars.

“This is really a catalyst moment for the company. This is the moment where we’re establishing Hershey as both a sweets and salty company,” Riggs said in an interview ahead of an event this week at its headquarters in Pennsylvania to outline its salty snacks strategy to Wall Street analysts. “It’s a new time for Hershey. It’s an exciting moment where we’re going back to our roots as makers and builders and innovators.”

For much of its history, Hershey has been known for its portfolio of confections that generated $8.5 billion in sales in 2022. But under the leadership of Michele Buck, the company’s CEO since 2017, Hershey has transformed itself into a “snacking powerhouse” by going all in through a series of acquisitions to establish a commanding presence in the $36 billion salty snack category.

Hershey purchased Amplify, the parent company of popcorn brand SkinnyPop, for $1.6 billion in 2017, the largest deal in the company’s history. It also acquired Pirate’s Booty cheese puffs a year later, and in 2021 doled out $1.2 billion for fast-growing Dot’s Homestyle Pretzels and its Midwest co-manufacturer Pretzels Inc.

skinnypop, hershey

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Christopher Doering/Food Dive

 

The acquisitions have rapidly given Hershey “one of the strongest snacking portfolios” in the salty category, Riggs said, and turned the division into a major revenue generator, contributing about 10% of the company’s more than $10 billion in annual sales. Hershey is aiming to grow its salty snacks division to about 20% of the company’s sales, about $3 billion, within a decade, she said.

“It is amazing how quickly we’ve gone from zero to 10% of sales and getting to the point of scale,” Riggs said. “We really have hit our stride.”

Aiming for the market leaders

The size of the salty division, which last year posted nearly $1.2 billion in sales, places Hershey in a position where it can justify spending money to build out manufacturing capacity, increase supply chain capabilities and tap into additional synergies that come with having a bigger portfolio operating in the same category. 

In addition to increasing sales through wider distribution and ramping-up of production, Hershey plans to address consumer needs by rolling out smaller individual packaging for lunches and on-the-go snacking to complement the large-size bags of pretzels and popcorn commonly used at parties and other gatherings. It also is targeting new varieties of Dot’s, which is known for its bold flavors, including Southwest and Honey Mustard.

Brittany Quatrochi, an analyst at Edward Jones, said the move into salty snacks has been “a good avenue of growth for [Hershey] … [that] complements the portfolio they have on the confectionery side.”

The advancement also has provided Hershey with more opportunity to “leverage” its salty brands by combining them with products on the sweets side of its business. Hershey, for example, has debuted Reese’s Popcorn drizzled with peanut butter and milk chocolate as well as Dot’s Cinnamon Sugar Pretzels.

“There are a lot of occasions where having the scale of both is complementary and beneficial,” Riggs said.

dot's, pretzels, Hershey

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In the fourth quarter alone, retail sales of SkinnyPop increased 19.7%, boosting Hershey’s market share in the ready-to-eat popcorn category by 1.3%. Dot’s retail sales were even stronger, growing 32.3% as the brand continued to gain distribution and acquire new buyers.

The lone challenge came with Pirate’s Booty, which declined 3% due to lower promotional levels as Hershey worked to reduce supply chain complexity and improve profitability. 

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