HERSHEY, Pa. -- The Hershey Co. is reaping the rewards of its recent acquisition of Amplify Brands Inc.
The chocolate giant’s snacking sales increased 0.3% during this year’s second quarter, boosting the category’s year-to-date growth to 4%. The growth was leveraged by Amplify's SkinnyPop brand: The ready-to-eat popcorn grew 8.3% in the second quarter, according to Hershey.
Hershey’s snacking category has now surged for the third quarter in a row.
Gains in both household penetration and purchase frequency sparked the snacking increase, said Michele Buck, president and CEO of the Hershey, Pa.-based company, during the company’s second-quarter earnings call on July 26.
“We established Amplify as a separate division to nurture and strengthen our emerging and better-for-you brand portfolio,” she said. “We have good visibility into second-half plans and expect both SkinnyPop and ready-to-eat popcorn category strength to sustain as we move throughout the year.”
Another “emerging” Amplify brand, BarkThins, has also sparked Hershey’s growth throughout the second quarter. The shareable dark-chocolate snacks have grown about 35% in the past 12 weeks, Buck said.
But emerging brands weren’t the only second-quarter performers. Hershey’s “core franchises” increased 1.3%, driven by Hershey’s Gold, Reese’s and Ice Breakers Gum—the latter of which has grown more than $145 million since 2014, said Patricia Little, senior vice president and CFO of Hershey.
“And our new Kit Kat line is on track to start producing volume in [the] fourth quarter and will be a key enabler of the brand's 2019 growth,” she said.
The profitable second quarter wasn’t painless, though. In April, Hershey revealed it would cut SKUs for various candy products due to increased delivery costs and cocoa prices complicating production and distribution. At the time, Buck said this packaging review and shelf transformation would spark future growth for Hershey.
And she was right: The SKU cuts contributed to the company’s mid-year success, Buck said. Hershey now foresees its full-year net sales increasing toward the low end of the 3.5% to 5.5% range, said Little.
“This operating environment requires an agile approach to portfolio, strategy and pricing,” said Buck. “We continue to take a proactive approach to optimize our portfolio and deliver increased profitability.”
Hershey has more than 80 brands that drive more than $7.4 billion in annual revenues, including Hershey's, Reese's, Hershey's Kisses, Jolly Rancher, Ice Breakers and Brookside.
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