As consumer tastes shift and buying habits change due to inflation and growing economic uncertainty, Hershey is placing a larger importance on innovation.
The maker of Kisses, Reese’s and Dot’s, which posted $11.2 billion in net sales last year, is tightening its approach to product innovation and becoming more selective around which consumer trends receive the most attention and investment.
The confectionary giant is not only giving more attention to the products themselves, but also to the packaging the sweets and salty snacks are placed in and how they are displayed on store shelves.
Food Dive sat down with Tiffany Menyhart, Hershey’s chief customer officer, at the Sweets & Snacks Expo in Indianapolis to talk about innovation, consumer trends and buying habits. Menyhart, a former Kraft Heinz and Mars Wrigley executive, joined Hershey in March.
This interview has been edited for brevity and clarity.
FOOD DIVE: How has innovation changed for Hershey and where do you see it going?
MENYHART: You will see from us, fewer, bigger, better in terms of everyday items that go on the shelf 12 months out of the year. You will also see us being very selective in terms of what we want to do as an LTO, or a limited-time offer, where we know there's a key consumer trend we want to capitalize on.
A great example of that is Reese's Peanut Butter and Jelly. We know it's a big consumer trend. We've launched that as an LTO this year versus a permanent item.
What are consumers looking for when it comes to innovation?
MENYHART: They're looking for us to bring something that's new news and different to drive incrementality.
And I'll give an example of that, too. We're really investing in technology around filled bars. That is on trend. It's on trend globally. We just launched as part of our s'mores program, Hershey's Caramel. Well, we know caramel is the number one inclusion to s'mores. We created the Hershey bars that are the same size as the graham cracker, ready to go. We're already seeing several of our top customers ask for additional supply because they are experiencing higher than anticipated sell through off of the s’mores displays.
Tiffany Menyhart, Hershey’s chief customer office
Courtesy of Hershey
How does inflation and consumer spending impact innovation? Does it become even more important?
MENYHART: Innovation becomes important, and then so does our ability to offer value in the marketplace.
There are all types of ways you offer value, right? It can be upsizing in price per ounce. It can also be offering a value price point at the right time through price and promotion. We're doing all that, and so we partner with our key retailers to make sure it's making these moments accessible.
Hershey also has spent time improving its packaging, and has moved toward more stand-up pouches. Has the new packaging helped your candy better stand out on shelves?
MENYHART: Over the last five to six years, Hershey’s given a lot of attention to packaging, specifically in our take-home business. We launched stand-up pouches across our take-home chocolate business, could have been around 2018, 2019, right before COVID, and saw a tremendous lift to the base business as a whole.
Now we were going to also go into snack size. We're a 47 [percent] share of this business. Snack size is a really important business to us also because we play huge in the seasons. This is a big opportunity for us to stand up snack size. This will roll out in early ‘26.
This was the last remaining pack type for us to stand up. And frankly, we were going to do it, and then COVID occurred, so we redirected all of our capacity investment at the time to just supplying the product. So this will absolutely help. And if you look at the images, rather than them laying flat on the shelf, they will now stand up, and it will be clearly called out that these are snack size, so these are shareable, and they're portable, and they're each individually wrapped.
Hershey is doing end caps at grocery stores that display both your salty and sweet offerings. What are the benefits of doing that rather than having them in separate aisles in the grocery store?
MENYHART: We see a higher lift overall when you merchandise both together. When we've put solely candy on there, Hershey candy, [we get a] 30% lift in candy category sales. That's pretty good, right? … When we merchandise salty and sweet, we see a lift of 34% in sweet and 38% in salty. So both merchandised together drives higher overall sales lifts.
With all the noise around tariffs and inflation, how do you see Hershey emerging from these challenges?
MENYHART: Hershey's not immune, and Hershey's part of a larger industry that could be impacted.
I think the thing that I love the most is we have a lot of products that are made here in the U.S. We invest in manufacturing facilities in the U.S. We evaluate all the time different suppliers. We are adapting and looking for alternate supplier sources where necessary. The most important thing, and I'll talk from our retail partners' lens, because I have a lot of conversations around this, is number one, can Hershey still get us the products on the shelf that we need and offer the right options to our shoppers?
Whether it's value, whether it's innovation, whether it's an LTO, whatever that looks like, and then if they face potential issues with filling their shelves, can Hershey be the partner to fill them? And the answer is yes.
Source link
:max_bytes(150000):strip_icc()/fw-roundup-target-coastal-trend-collection-tout-1037d3b769a74c48a7b8f67809ba2d11.jpg "Shop Beachy Kitchenware at Target’s Coastal Collection")
:max_bytes(150000):strip_icc()/Texas-Becomes-the-7th-State-to-Ban-Lab-Grown-Meat-FT-BLOG0625-08c46f0f6c3548d297a0838805e456aa.jpg "Texas Joins 6 Other States in Banning Lab-Grown Meat")
:max_bytes(150000):strip_icc()/one-off-fil-loved-grill-brush-tout-de6bd465ece74dfd9b370ac3083845ff.jpg "Safer Grilling Starts with This Bristle-Free Brush — Now on Sale")