BOCA RATON, FLA. โ While executives with The Hershey Co. have spoken often in recent years about the companyโs effort to become a leading snacking powerhouse, it is its confectionery business that is ready to deliver a slam dunk due to a new partnership with former National Basketball League star Shaquille OโNeal and a stronger focus on Reeseโs.
In a Feb. 20 presentation at the Consumer Analyst Group of New York (CAGNY) conference being held in Boca Raton, Michele G. Buck, chairman, president and chief executive officer of Hershey, Pa.-based Hershey, said the company has identified three priorities to spur additional growth within its North America Confectionery segment, which posted sales of $9.12 billion in the fiscal year ended Dec. 31, 2023.
Hersheyโs top priority, Buck said, is to โlead with Reeseโs,โ which she called the companyโs โmothership brand.โ
โWe have invested increasing the capacity on Reeseโs by 30%, just to meet the current volumes that we have on Reeseโs because weโve seen such strong growth,โ she said. โThis year, we have even more media on Reeseโs. We upped the budget, but we also improved our media targeting and essentially our reach is up about 40% in impressions. And weโll continue to drive incremental merchandising on Reeseโs as we really invest behind some of our big properties: the Super Bowl, March Madness and the Olympics coming up.โ
Buck said innovation also will play a role in Reeseโs growth, pointing to the recent introduction of Caramel Big Cup, which debuted in November 2023. The treat combines Reeseโs peanut cup with a layer of caramel, all in the larger Big Cup format. Reeseโs Caramel Big Cup contains 190 calories, 10 grams of total fat and 3 grams of protein per serving of one cup.
Winning in store will be โabsolutely criticalโ to Hersheyโs success in North America Confectionery, Buck said.
โOur category management team spends a lot of time partnering with retailers to look for opportunities to improve the availability of our category, the visibility of the category as consumer behaviors and store environment shifts,โ she said. โWe are always very focused on our gold standard planogram. Iโm pleased to say that we have that in over 85% of key retailers. We have worked to evolve queuing lines to make the queuing even more of a good experience with consumers. And the work that weโve done has actually led to 20% increases in purchase conversion.
โWe continue to focus on that love and passion consumers have for seasons and celebrations by making sure that that gets adequate display and adapting to consumersโ ever-changing behaviors and making sure that we have opportunities for add-on items when consumers are coming to pick-up locations to get their groceries.โ
The third priority for Hershey involves the companyโs sweets arena. Buck said Hershey plans to increase its capacity on gummies by 50% in 2024.
โWhat that is allowing us to do is to have more SKUs on our core business at retail,โ she said. โItโs allowing us to innovate, to invest more in media and also to launch new partnership models in the gummies segment.โ
One of those partnerships is with OโNeal, who has become a popular product pitchman since retiring from the NBA in 2011. OโNeal, who will partner with Hershey to help spark the companyโs gummies segment, was on hand at CAGNY and brought some humor to the presentation by talking about his partnership with the company.
โYou guys have a wonderful research and development team, and I was there eating gummies all day, all day, every day,โ OโNeal said. โAnd I think we will come out with a great product. I canโt wait to get back to TNT to just tell Charles (Barkley, former NBA player and fellow TNT basketball analyst) to fight me. Say, โCharles, just bite my head off.โ
โโฆ the reason why I teamed up with Hershey is Iโve always aligned myself with great teammates and great partners, and I just want to help you guys continue to win championships.โ
