Hershey’s knowledge journey
How the candy company uses Big Data to inform new strategies and partnerships
The first day of Retail’s BIG Show featured a presentation by Michele Buck, president for North America with the Hershey Company.
Buck began with an overview of Hershey, which has 22,000 employees, 80 brands and over $7 billion in annual revenues. Buck described Hershey’s longstanding — and structural — commitment to society; per the terms of founder Milton Hershey’s will, the company actually belongs to a trust dedicated to the maintenance of the Milton Hershey School, which provides free education to children from low-income families. A more recent venture is Nourishing Minds, which works to provide basic nutrition to children in West Africa.
Insight and strategy
In recent years, said Buck, Hershey “decided we needed to do research to gain insight and knowledge about our market. We widened our focus to the entire snacking market, not just confectionery.” In the process, the company has built a massive database on stores, store clusters and shopping habits, down to the ZIP code level.
One focus for Hershey’s research is the behavior and desires of Millennials. “There are 81 million Millennials,” Buck said, “representing 27 percent of the adult population.” Partly driven by the presence of this new generation and its concerns and values, the public’s relationship with food is changing. To an unprecedented degree, for example, people are asking for information on ingredients and their sourcing.
Partly based on its research and data analysis, Hershey has developed a new strategy established on an evolution of its portfolio, marketing and relationships with retailers. Hershey is expanding its product offering to a broader snacking horizon, emphasizing a number of higher-priced products, such as its Brookside and Cadbury offerings.
It also reflects changes in family patterns and eating habits; according to Hershey’s research, 60 percent of all meals in this country are now consumed as snacks. This creates a market for products such as jerkies and protein bars.
According to Hershey’s research, 60 percent of all meals in the United States are now consumed as snacks.
Partnerships
Part of Hershey’s strategy depends on a growing network of partnerships. One sets up a button on a customer’s Amazon pages that enables one-click refills of Reese’s Pieces or Kisses or whatever is running low. In partnership with the Giant Eagle chain, Hershey is looking for new approaches to the candy aisle. One, which Buck says is highly popular, features a special custom Kisses dispenser in which preprinted stickers carrying messages of affection can be affixed to the bottom of giant Hershey’s Kisses.
An even more advanced piece of technology, developed in partnership with 3D Systems, is a 3D printer that prints pieces of chocolate. The device, currently housed at Hershey’s Chocolate World at headquarters, allows users to design a chocolate object and then watch it print.
Working with Supervalu’s Cub Foods, Hershey has developed beacon end caps that have, Buck says, helped stores boost candy aisle sales by as much as 20 percent. The company has also expanded its work with Supervalu (and other partners) beyond the candy department into overall store planning.
This story originally appeared in print as part of STORES Convention Daily on January 18, 2016. Download the digital edition and see more coverage of Retail’s BIG Show 2016.
