E-commerce Helps Hershey Survive Pandemic

People still want candy, but their purchasing habits have shifted.

June 09, 2020

HERSHEY, Pa.—The 126-year-old Hershey Company has survived world wars, natural disasters and economic depressions, and now it’s taking on a pandemic, reports Business Insider.

“Our beloved brands have stood the test of time,” said Kristen Riggs, chief growth officer, Hershey. “We have been part of people’s lives through all these moments.”

When the pandemic hit, consumer habits changed almost immediately, she said, and the Hershey team worked to identify and meet changing demands. The rapid shift to e-commerce might have been the most important trend defining the future of consumer spending for Hershey. The company already was focusing on digital development across consumer and retail channels, but now, it was a matter of following the trends of consumers to pivot business accordingly.

Overall, the pandemic has caused a surge in snacking. While people are still purchasing chocolate and candy, the way they are doing so has changed. For example, Hershey has recognized particularly strong sales in its larger five and 12 packs of standard candy products, as well as in its baking segments and made adjustments in response.

“This purchasing behavior is similar to Halloween where people buy larger assortment bags for different types of occasions like parties or trick-or-treating,” Riggs explained.

Brands like Hershey’s and Reese’s worked to become comforting and cultural mainstays in the lives of its consumers, Riggs added, another massive advantage for a brand seeing wins from people turning to food that offers comfort and familiarity. As such, with more families staying at home, Hershey has also seen a surge in snacking related to “home cocooning behaviors,” such as movie watching, baking and activities in the backyard, all of which require different types of snacks.

But the business is not without challenges. Hershey’s on-the-go categories and away-from-home business have seen a drop in sales, as many of the company's regular venues and buyers have temporarily halted orders. As a result, Hershey has turned to reinforcing digital and e-commerce options to its customers.

In February, Hershey's director of digital Andrea Steele told Business Insider that the company was in the midst of a digital transformation and leveraging various tactics to penetrate a consumer in an online setting.

"We have 99% household penetration offline for candy as a category," Steele said. "But online people aren't thinking, ‘Hey, I'm going to go online and buy my candy there.' So, discoverability as a category is so much different, and we have to get creative around how we're getting in front of those consumers."

One way of doing that is through different partnerships with other candy-complementary brands online and by deploying digital cart intercepts before checkout to foster an "impulse-buy" equivalent online. Plus, Hershey has figured out how to dominate top search results on Amazon.

"Not every brand can win on chocolate," Steele said, referring to Amazon's search algorithm. The key is understanding the various subcategories within chocolate—chocolate and peanut butter, chocolate and caramel—and then optimizing lead brands within Hershey to stand out in search within that category. That way, each Hershey sub-brand is positioned to essentially "win" search in that category on Amazon and end up as the first result.