Hershey Sales Rise Despite Growing Competition
Oct. 26, 2017 12:40 p.m. ET
As society changes, companies must
remain in the game. For Hershey, it has been a true challenge to adapt to
America’s desire for less-processed foods and the growth of health-focused
snack brands. Nevertheless, Hershey is holding up its own weight. Sales rose
1.6% to $2 billion in the last quarter. They are taking measures to ensure they
do not fall behind. First and foremost, the company developed a new chocolate
recipe to use real vanilla flavoring and remove high-fructose corn syrup to
satisfy the people’s desire for simpler ingredients. Since the snack category
continues to grow reasonably well, Hershey is also expanding its portfolio.
They have branched out beyond candy by buying a beef-jerky brand and high-end
sweet snack makers such as BarkThins. Hershey has also created chocolate
covered pretzels and Reese’s snack mixes to shelf the brand in the snack
aisles. Apart from product competition, Hershey is facing a great deal of
pressure from retailers. They will also spend money on improving the ability to
get products to these retailers on time and reduce instances where they run out
of products.
Hershey dangerously lingered on the
line between market maturity and sales decline, as America’s growing
health-conscious population threatens the candy category. When sales began to
slightly decline, Hershey was effective in defining their problem and
identifying a solution. The family brand has been able to keep up with the
changing society by listening to customers and considering their competitors to
generate new-products. A problem still waiting for a solution is their physical
distribution; however, they are planning to take measures to fix this. They
might consider multiple transportation methods considering the cost, delivery
speed, and dependability of the different modes.
No one company can truly escape the
changing market. It is rarely taken into account that the existence of
companies as big as Hershey can be threatened. Companies must be able to adapt
to the needs of people and respond quickly. Hershey was effective in keeping an
close look at the market.
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