Inside Hershey's C-store strategy

by Monica Watrous
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Hershey convenience store products
The Hershey Co. is strengthening its foothold in the increasingly important convenience channel.

HERSHEY, PA. — Through innovative new products and partnerships with retailers, the Hershey Co. is strengthening its foothold in the increasingly important convenience channel. The confectionery company showcased its products and programs at the National Association of Convenience Stores Show, held Oct. 11-14 in Las Vegas.

Hershey leverages consumer insights and data in planning effective floor displays and product mixes to help convenience stores increase sales velocity. The company found that 63% of confection sales come from the in-line set, while 37% of sales come from merchandising and secondary placement.

“We have put together a winning formula for retailers based on our best-in-class consumer insights and shopper-first mindset,” said David Nolen, senior director, CSI, The Hershey Co. “Priority No. 1 is getting the in-line set correct followed by ensuring confection is present under the counter and in secondary locations.

“Lastly, we’re recommending growing take-home package type space; take-home pack types are growing at twice the category because consumers are increasingly shopping smaller format stores for everyday items.”

The age of one-size-fits-all solutions is over, he added.

“We are on a journey to use multiple, disparate data sources to understand the unique demographics around every single C-store in the United States, so that we can bring high-impact, customized solutions to our retail partners,” Mr. Nolen said.

Seasonal innovation figures largely into Hershey’s C-store strategy. Within the convenience channel, seasonal confectionery sales have had an annual category growth rate of nearly 20% in the past four years, according to Nielsen data. For Hershey, which has more than 78% share and all 10 of the top 10 seasonal items, increased distribution of such holiday-themed products as the Reese’s 1-lb Peanut Butter Cup is expected to drive higher sales. Customers who purchase that product typically add another 1-lb item, such as Hershey’s 1-lb Milk Chocolate Bar, or a gift card to the basket, fueling incremental sales in convenience stores, the company said.

“Seasonal items are special to consumers and have been a unique growth driver in convenience stores,” Mr. Nolen said. “These limited-time-only products are often on front counters in stores and become additions to the planned purchases. We strive to provide unique and distinctive products with ties to the seasons.”

Snacks represent a growing portion of Hershey’s portfolio in convenience stores, as on-the-go eating becomes more prevalent with consumers. Recent snack launches from Hershey include Brookside Fruit & Nut Bars, featuring fruit, nuts and seeds with dark chocolate; Hershey’s, PayDay and Mr. Goodbar Snack Bites, which combine nuts and bite-size confections; and Hershey’s and Reese’s Snack Mixes, which include nuts, pretzels and candy bites.

Hershey also remains focused on growing its core confection business. At the NACS Show, the company unveiled new candy, mint and gum products, including Allan Candy gummy candies, Kit Kat Big Kat Bar, Ice Breakers Cool Blasts Chews and an updated Take5 Layer Candy Bar.

Mars convenience store products
Mars Chocolate North America introduced Snickers Crisper and goodnessknows Snack Squares.

Other innovation at NACS

Hundreds of new products from more than 1,000 exhibiting companies debuted at the show. Mars Chocolate North America, Hackettstown, N.J., introduced Snickers Crisper, a new chocolate bar with crisp rice, caramel and peanuts; goodnessknows Snack Squares, which contain fruit, nuts, toasted oats and a layer of dark chocolate; and Combos Baked Snacks Chocolate Fudge Pretzel, featuring crunchy pretzel shells filled with creamy fudge.

On the beverage side, PepsiCo, Inc., Purchase, N.Y., unveiled 1893, a new craft soda brand in ginger and cola flavors, and expanded its Mtn Dew Kickstart energy beverage line with blueberry pomegranate and watermelon varieties. The Dr Pepper Snapple Group, Plano, Texas, showcased Snapple Straight Up Tea in honey and rooibos varieties.

J&J Snack Foods Corp., Pennsauken, N.J., trotted out a range of new products and equipment at the show, including new ICEE frozen beverage flavors, soft pretzel melts and buttermilk biscuit melts. The company also presented its new Mix It Up machine, which allows consumers to customize an ICEE frozen beverage with a variety of add-in flavors.
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