Hershey’s Secret Formula? Mix Salty With Sweet
By: James Flippin · October 28, 2022 · Reading Time: 3 minutes
A Delicious Track Record
Hershey Co (HSY), founded in 1894, is about as American of a company as it gets. For over a century, Hershey has helped Americans satisfy their sweet tooth with brands like Reese’s, Twizzlers, Kit Kat, and Jolly Ranchers, while Hershey’s stock returns have left investors just as satisfied.
Over the past five years, Hershey stock has doubled. It outperformed 90% of the S&P 500 this past year, including most major tech companies, and it achieved this success without raising prices on its candy products during the highest inflationary period in decades.
So, what is Hershey’s secret formula to success?
Mixing Salty + Sweet
Michele Buck took over as CEO in 2017 with a unique strategy: to focus on the U.S. market instead of international expansion. For a company that has been operating in the U.S. for 128 years, this was counterintuitive. The plan? To buy other snack companies that complement Hershey products.
Hershey went on a buying spree and scooped up up-and-coming snack companies like SkinnyPop, Pirate’s Booty, Dot’s Homestyle Pretzels, and Pretzels Inc. It literally bought salty snacks to pair with its sweets.
The plan worked, with North American sales increasing from 88% of Hershey’s total sales in 2017 to 92% in 2021. Once Hershey started itemizing its income, it became clear that its new salty brands were the ones driving growth.
If It’s Not Broken…
Hershey is succeeding in today’s world by taking a simpler approach. While many companies are trying to build a metaverse, launch NFTs, or harness AI technology, the Great American Chocolate Bar is simply buying new snacks that taste good with the old ones.
It’s a great example to other companies that sometimes the simplest strategies are the most profitable. And, with the biggest candy day of the year around the corner, it’s a great time to unwrap your favorite snack and spend a moment enjoying the simple things in life.
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