HERSHEY, Pa. -- The Hershey Co.’s consolidated net sales increased by more than two percentage points in this year’s third-quarter. The candy and snack company's Halloween product launch and its recent acquisition of Pirate Brands drove the surge, Michele Buck, president and CEO, said during the company’s third-quarter earnings call on Oct. 25.
Buck said Hershey remains on track to achieve its financial targets set earlier this year: for net sales to increase toward the low end of the 3.5% to 5.5% range.
“Our U.S. core confection retail takeaway and share trends are sequentially improving in line with our expectations, driven by strong Halloween results and distribution gains on core items,” Buck said. “The addition of Pirate's brands strengthens our brand portfolio and marks our second high-growth, high-margin acquisition this year to capture incremental snacking occasions.”
In August, Hershey offered consumers a look into this year’s Halloween promotion. It included an array of new products, such as Glow in the Dark Snack Wrappers, Spooky Foils, Kit Kat Dark Chocolate Snack Size and Twizzlers Pull ‘n' Peel Candy Orange and Black Cherry Snack Size. New York-based research firm YouGov reported that Hershey’s general portfolio is expected to see an increase this Halloween, since its current ad awareness score—the percentage of consumers who see the brand’s advertisements—has increased four percentage points from October 2017.
Buck said Hershey expects record-breaking profits for both in-store and online sales for the spooky holiday.
“From core innovation and occasions programming to strong sell-in with more than 500 employees volunteering at retail, we are outperforming the category and on track to deliver our first-ever $600 million [Halloween] season,” Buck said.
Hershey acquired Pirate Brands, the maker of Pirate’s Booty, on Sept. 12 for $420 million. The deal finalized on Oct. 18 after customary approvals. Pirate Brands has grown more than 7% in the latest four- and 12-week periods, which leads Hershey to foresee the snack brand thriving in Hershey’s portfolio, Buck said.
“[Pirate Brand’s] growth has been balanced across both distribution and velocity gains on core SKUs, a key indicator of healthy and sustainable expansion,” she said.
The successful quarter stems beyond acquisitions and Halloween promotions. Hershey’s candy, mint and gum (CMG) category sales grew 2.5% over the past four weeks, primarily driven by a 3.2% growth in the chocolate sector. Buck credits chocolate’s surge to the company’s new Heartwarming Campaign, a dedication to founder Milton Hershey, which launched on Sept. 13.
“In the past month, since we launched the campaign, retail takeaway on our Hershey's Milk, Hershey's Almond and Hershey's Special Dark Bars, which represent almost $750 million of retail sales, was up almost 7%,” she said. “Our Reese's performance is also accelerating, as expected, behind Halloween strength, a refreshed campaign and the national rollout of Outrageous [bars].”
Hershey, based in Hershey, Pa., 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.
Photograph courtesy of The Hershey Co.