Hershey’s Growth Is a Sweet and Salty Story

The confectioner has focused on North American sweets and salty snacks—unconventional moves that have paid off.

October 31, 2022

ALEXANDRIA, Va.—The Hershey Company’s stock is up 37% and has increased 60% over three years and 120% over five, reports the Wall Street Journal. The stock has doubled in five years and outperformed more than 450 companies in the S&P 500 this year. What has contributed to Hershey’s phenomenal growth? Hershey has become more American and less reliant on chocolate.

“There are many companies that will find themselves dealing with crises during this market downturn. Some will double down on existing strategies. Some will diversify. Hershey did both and discovered an unlikely new identity,” writes the Journal.

When Michele Buck transitioned to CEO of Hershey in 2016, she told investors that changes were coming.

The first change was spending billions on salty snacks—popcorn, cheese puffs and pretzels. Over the past several years, Hershey has purchased SkinnyPop, Pirate’s Booty, Dot’s Homestyle Pretzels and Pretzels Inc.

“We see great synergies there,” Kristen Riggs, Hershey’s chief growth officer, told the Journal. “SkinnyPop was a seminal moment for us as a company.”

Hershey purchased SkinnyPop in 2017, which led to the company buying Pirate’s Booty in 2018 and Dot’s in 2021.

Although the company’s North American sweets portfolio is generating more revenue than ever, its salty business grew faster than sweet for two consecutive quarters, and Hershey expects salty to continue to grow.

“They’re not just a confectionery company anymore,” Morningstar analyst Erin Lash told the Journal.

The second transition for the company was to scale back on its international business and focus on North America. The Journal reports the company, at the time, was under pressure, and it was a risky move.

“We’ll have less growth in the international markets than perhaps we’ve seen in the past,” Buck said in March 2017. “We’re clearly seeing that North America is going to be the biggest driver.”

The effort paid off. North American sales went from 88% of Hershey’s total sales in 2017 to 92% in 2021. Hershey had decided not to compete against varied tastes and established brands internationally and focused on where it had an advantage—home.

Hershey has a 46% share of the U.S. chocolate aisle today, and while it still does business overseas, the future of Hershey will be determined by Americans, says the Journal.

“This version of corporate reinvention worked because Hershey at its core remains the same. It isn’t suddenly trying to be a metaverse company. It’s a snack company. Now it just has more snacks,” writes the Journal.