Hershey's Snapshot: company is expanding presence in non-chocolate candy given strong consumer demand, particularly in the gummy segment; gum and mint sales rebound from year-ago period with retail sales growing 20% to 25%, ahead of pre-pandemic levels

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