- Hershey CEO Michele Buck said at an investor presentation on Wednesday that despite an increase in healthy foods, consumers are still interested in indulging in snacks — either sweet ones like ice cream and candy, or salty ones according to Fortune.
- The NPD Group released analysis that shows while Americans are still consuming three meals a day, many of those meals are smaller to make room for snacking.
- Hershey predicated it would see an increase in sales by 2% to 3% in 2017.
Buck said the company believes M&A will play an important role in diversifying the company’s portfolio going forward, with the aim of becoming "an innovative snacking powerhouse," according to slides from her investor presentation.
Snacks are a good growth area for Hershey, which saw big gains with recently acquired brands like Krave and barkTHINS. Not coincidentally, these two acquisitions are credited to Buck, an 11-year company veteran who officially took the helm at the Pennsylvania-based chocolate manufacturer on Wednesday.
According to Buck's presentation, Hershey currently has the nation's second-largest share of the snacking market, at 7.5%. By all accounts, snacking is growing as a meal replacement among millennials and younger generations, so this is a good place for Hershey to invest.
Investments in snacking also help with struggling overseas markets, which played a role in this week's announcement that 15% of Hershey's international work force would be slashed. Full details of the cuts, which will affect about 2,700 workers, are not yet known. However, many analysts expect they will be centered around China, where the chocolate business has been weak. Snacks are much stronger there. According to Buck's presentation, snacking is worth $130 billion in the China/India/Southeast Asia region, and is growing by 6%.
But what will Hershey acquire next? Something in its confectionery sweet spot? Brands of salty snacks, like crackers or pretzels? Or something completely different that Hershey can grow and improve, like the ice cream business from Unilever?
Last year, Hershey was a prime acquisition target, with Mondelez offering $23 billion, The candy company quickly shut down Mondelez but there’s still speculation in the industry that something could happen.