CAGNY: US "attractive growth market", insists Hershey

By Katy Askew | 21 February 2013

US chocolate maker Hershey has insisted it remains focused on driving growth at home, even as it works to expand its business in key international geographies.

Addressing analysts at the Consumer Analyst Group of New York conference yesterday (20 February), Hershey management once again outlined plans to grow its top line by expanding in key international geographies, notably China, Mexico and Brazil. The group emphasised it is "on-track" to grow international sales by 15-20% in 2013, with the target of reaching US$1bn in international sales by end-2014.

However, Hershey emphasised, the Reese's Pieces maker also views the mature US confentionery market as a "growth opportunity".

"Focus on our core US business is a top priority and fundamental to our success," CEO John Bilbrey told his audience. "We see the US as an attractive growth market."

Bilbrey said the US confectionery category is "fundamentally advantaged" because "confections are available almost everywhere". The result is that Hershey brands benefit from high household penetration and appeal to impulse shoppers.

He added: "Another unique aspect of the category is its ubiquity. With strong presence, not only in traditional channels, such as mass and food, but also in channels that many CPG companies do not meaningfully penetrate, such as convenience stores, drug, wholesale club, dollar stores, specialty channels like food service and even vending."

According to Bilbrey, Hershey is growing its US business by developing its multi-channel strategy. "A meaningful piece of our business comes in what some companies may call alternate channels," he said.

Bilbrey revealed Hershey has increased its share of convenience sales for four consecutive years. "Our iconic brands and instant consumable packaging is offering alternatives, it's meeting the needs of consumers in this very important, on-the-go environment."

Hershey has driven top line growth in the US by investing in product development and brand building activities. Bilbrey added Hershey is also able to grow sales in the US because the confectionery category is "highly responsive" to merchandising.

Michele Buck, chief growth officer, added Hershey is well-placed to benefit from this because it has invested in "consumer and shopper" insights in order to "build messaging and programs to best meet consumer needs".

"This understanding of the consumer drives all of our portfolio and investment decisions," she emphasised.

This strategy has allowed Hershey to grow market share - a trajectory that the company intends to build upon. In 2012, Hershey's retail take away outpaced the category, rising 5.7%. As a consequence Hershey saw a market share gain of 0.6 points.

Sectors: Confectionery, Multichannel

Companies: Hershey

View next/previous articles

Currently reading -

CAGNY: US "attractive growth market", insists Hershey

There are currently no comments on this article

Be the first to comment on this article

Related research

The Hershey Company - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage....

The Hershey Co in Packaged Food (World)

Hershey has intensified its international market expansion, although the process remains slow paced and largely organic. It mainly targets the Asia Pacific and European markets, while delivering high sales growth in Latin American markets. However, g...

Chocolate Market in United States to 2016

The report presents detailed data on consumption trends in the Chocolate category in United States, analyzing consumption volumes and values at segment level. It also provides indispensable data on distribution channels, profiles of companies active ...

Related articles

On the money: Hershey bullish on US business

Hershey has expressed its confidence in the future of its US business and the wider confectionery sector in the country after a strong first-half performance saw it gain market share across its business and lead it to up its forecasts for 2013.

US: Hershey ups earnings forecast after "strong" Q2

Hershey today (25 July) lifted its forecasts for earnings per share after what the US confectioner described as a "strong" second quarter.

MEXICO: Hershey eyes improved Mexican cocoa yeilds

US chocolate group Hershey has confirmed plans designed to help its Mexican cocoa suppliers quadruple yields over the next five years.

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page