The Hershey Company Continues Leadership in Convenience and Identifies Consumer Trends

The Hershey Company (NYSE: HSY) continues to spearhead success in the convenience class of trade through innovative new products and strong partnerships with retailers that drive sales and profit growth. The confection category leader in North America, Hershey will showcase its market-leading products and programs in the National Association of Convenience Stores (NACS) Show October 11-14 at the Las Vegas Convention Center.

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ALLAN Candy is a non-chocolate line that offers both traditional and unique flavors to meet the growing consumer demand for gummy candy. (Photo: Business Wire)

Path to Growth

Hershey’s ability to synthesize numerous data sources to give the company a full picture of important trends for its brands, category and the full retail environment, has made it a trusted category advisor. These insights enable Hershey to plan the most effective floor sets and product mix to help C-stores increase their sales velocity. This year, the company was recognized by the Advantage Report for the Convenience Channel as the top overall “Fast Moving Consumer Goods” manufacturer.

At the show, Hershey will be sharing its key priorities to put every C-store on a path to growth. “We have put together a winning formula for retailers based on our best-in-class consumer insights and shopper-first mindset,” said David Nolen, Senior Director, CSI, The Hershey Company. “Priority No. 1 is getting the in-line set correct followed by ensuring confection is present under the counter and in secondary locations. Lastly, we’re recommending growing take-home package type space – take-home packtypes are growing at twice the category because consumers are increasingly shopping smaller format stores for everyday items.”

Data points informing Hershey’s key priorities:

• 63 percent of confection sales come from the in-line set1
• 37 percent of sales come from merchandising and secondary placement2
• Take-home package types are growing at twice the category3

“While key category strategies are applicable across the channel, we know that each C-store is different for a number of reasons. The age of ‘one-size-fits-all’ solutions is over,” added Nolen. “We are on a journey to use multiple, disparate data sources to understand the unique demographics around every single C-store in the United States, so that we can bring high-impact, customized solutions to our retail partners.”

Seasons

The Hershey Company is the seasonal confectionery leader in North America with more than 78 percent share and all 10 of the top 10 seasonal items4. It’s highly incremental to everyday sales, and that has been demonstrated in other channels year after year. In C-store, seasonal confectionery sales have an annual category growth rate of more than 19.6 percent in the last four years5.

Seeing continued growth is the holiday themed Reese’s 1lb. Peanut Butter Cup, which is the third bestselling seasonal item in the convenience store channel. This season, novelty items are expected to have a larger impact in 2015 due to increased distribution.6 Those customers purchasing the Reese’s 1lb. Peanut Butter Cup typically added another 1 lb. item such as Hershey's 1lb. Milk Chocolate Bar or a gift card to their basket, spending an average of $22 on the shopping trip.7 Seasonal novelty items are unique to convenience stores providing additional sales opportunities and garnering excitement and anticipation for customers due to the limited time availability.

“Seasonal items are special to consumers and have been a unique growth driver in convenience stores,” said Nolen. “These limited time only products are often on front counters in stores and become additions to the planned purchases. We strive to provide unique and distinctive products with ties to the seasons.”

Snacking Continuum

Hershey is focused on growing its core confection business, but also understands consumer tastes are changing. The company is listening and responding to this shift in consumer desires and preferences. Hershey’s insights-driven performance has allowed the company to build its core business to include a broader range of delicious snacks that are incremental to our core growth.

Hershey has some of the most recognizable and beloved confection brands and is focused on expanding these iconic brands to other categories and parts of the store. Additionally, as snacking and “on the go” are becoming more prevalent with consumers, the company is looking at ways to expand our portfolio across the snacking continuum.

Some of Hershey’s most recent innovations that deliver a differentiated snacking experience will be showcased:

• Brookside Fruit & Nut Bars – New Brookside Fruit & Nut Bars are made with real fruit, whole roasted almonds, rolled oats, pumpkin seeds and signature Brookside dark chocolate.
• Hershey’s, PayDay and Mr. Goodbar Snack Bites – New Snack Bites deliver an exciting snack experience by combining delicious nuts and Hershey’s iconic confection brands. These tasty snacks are packed with crunchy nuts in every bite.
• Hershey’s and Reese’s Snack Mixes – New Snack Mixes from Hershey provide a delicious combination of sweet, salty, crunchy and creamy. Hershey’s Snack Mix is packed with almonds, pretzels, and Hershey’s Milk Chocolate. Reese’s Snack Mix combines salty, crunchy peanuts and pretzels with Reese’s Pieces Candy and Reese’s Minis.

Product Innovation

In addition to Hershey’s expanding snacking portfolio, the company is focused on growing its core confection business. Hershey will showcase upcoming, new products and packaging updates at the annual NACS show, including:

• Allan Candy – Allan Candy is a non-chocolate line that offers both traditional and unique flavors to meet the growing consumer demand for gummy candy. These various gummy candies will be available in 5-oz. peg bags.
• Ice Breakers Cool Blasts Chews – Ice Breakers Cool Blasts Chews provide an icy cool blast of freshness in a quick-dissolving chew. Ice Breakers Cool Blasts Chews will be available in a new wintergreen flavor in a 0.8-oz. innovative slide pack.
• Kit Kat® Big Kat™ Bar – The same Kit Kat® treat consumers know and love – only bigger and crispier! Kit Kat® Big Kat™ Bar features five layers of wafers and just the right amount of smooth milk chocolate.
• New Look: Take5 Layer Candy Bar – A bold, contemporary look is coming to Take5 Candy Bars! Take5 Bars provide a unique taste experience by combining pretzels, caramel, peanuts and peanut butter, and covering it all with chocolate for a delicious salty sweet snack unlike anything else.

About The Hershey Company

The Hershey Company, headquartered in Hershey, Pa., is a global confectionery leader known for bringing goodness to the world through its chocolate, sweets, mints and other great-tasting snacks. Hershey has approximately 22,000 employees around the world who work every day to deliver delicious, quality products. The company has more than 80 brands around the world that drive more than $7.4 billion in annual revenues, including such iconic brand names as Hershey's, Reese's, Hershey'sKisses, Jolly Rancher, Ice Breakers and Brookside. Building on its core business, Hershey is expanding its portfolio to include a broader range of delicious snacks. The company remains focused on growing its presence in key international markets while continuing to extend its competitive advantage in North America.

At Hershey, goodness has always been about more than delicious products. For more than 120 years, Hershey has been committed to operating fairly, ethically and sustainably. Hershey founder, Milton Hershey, created the Milton Hershey School in 1909 and since then the company has focused on giving underserved children the skills and support they need to be successful. Today, the company continues this social purpose through 'Nourishing Minds,' a global initiative that provides basic nutrition to help children learn and grow. From neighborhoods across the United States to the streets of Shanghai and Mumbai and villages of West Africa, our goal is to nourish one million minds by 2020.

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1 Meyers Research Center C-Store Close up 2013
2Meyers Research Center C-Store Close up 2013
3 Nielsen C-Store CMG 2009-2014 CAGR
4 Nielsen C-Store CMG L52 weeks ending 8/8/15
5 Nielsen C-Store CMG 2009 – 2014 CAGR
6 Nielsen C-Store Data, 10 weeks ending 12/27/14
7 C-Store Retailer Internal Data 12/28/13

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