LOS ANGELES
,
May 1, 2023
(Industry Intelligence Inc.)
–
Overall Results: The Hershey Company had a strong start to the year with net sales up 12.1%, driven by both price and volume gains across segments Market share was impacted by supply constraints during the Easter season Company anticipates being able to fully support consumer demand for Halloween and holiday seasons Consumer behavior continues to evolve, with many consumers making changes to their spending in response to inflation Food at home remains a more affordable option for consumers versus dining out Snacks and candy continue to perform well Candy and Snacks: Seasons continued to be a growth driver Valentine’s Day up double digits versus the prior year Despite tighter shopping budgets, candy and snacks "remain an affordable way to bring joy to seasonal celebrations with loved ones" Hershey’s growth of 30% outpaced the category Investments in innovation and media have driven Q1 retail sales growth of almost 19% for Twizzlers and over 15% for Jolly Rancher There has been strong demand for gum and mint products as the category rebounds from subdued demands related to the Omicron surge last year Retail sales in both categories grew 20% to 25% in Q1 and are now ahead of pre-pandemic levels Salty Snacks: Within Hershey's North America Salty Snacks segment, high single digit volume gains and low double digit price realization drove overall net sales growth of over 19% SkinnyPop retail takeaway of over 23% drove a 220-basis point share gain in the ready-to-eat popcorn category Dot’s Pretzel’s grew retail sales over 25%, resulting in a pretzel category share gain of 100 basis points Company to acquire two manufacturing plants from Weaver Popcorn Manufacturing, a co-manufacturer of SkinnyPop Facilities will enable more flexibility, agility and resiliency across the company's growing salty snacks supply chain network International: Segment strength driven by distribution expansion, innovation and media activations Net sales in Mexico, Brazil, and India grew a combined 25% in the first quarter, driven primarily by volume Results include a stronger-than-expected Easter season in Brazil World travel retail business saw strong double-digit growth Looking Forward: Hershey expects to see better elasticities in the year-to-go period and plans to increase media investment Q2 will be challenging due to tough year-over-year comparisons and timing impact Expanding presence in non-chocolate candy is a strategic priority for Hershey given strong consumer demand, particularly in the gummy segment Construction has begun on a new chocolate making facility in Hershey, Pennsylvania, and they are on track to increase production capacity approximately 5% over the course of this year This includes the installation and start-up of three new Reese lines and a new Hershey line Hershey is implementing a high-single-digit price increase on 50% of its confection portfolio effective at the end of May The price increase will have more impact in 2024 than in 2023 due to implementation date and protection in place for big promotions and programming. Hershey believes that owning at least some degree of manufacturing across its strategic categories and businesses is important
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