Hershey tracked Covid developments after seeing s’mores demand rise as instances grew, CEO says
Hershey is seeing strong demand for its chocolates and seasonal candies as people are cooped up inside their homes, searching for every small occasion to celebrate.
“Throughout the entire year, seasons was one of the key drivers as consumers really wanted the comfort and the normalcy associated with seasonal traditions and rituals at a time when Covid uprooted their lives,” said Hershey CEO Michele Buck in an interview Thursday with CNBC’s Sara Eisen on “Closing Bell.”
One notable example, was a trend Hershey spotted that as coronavirus cases spiked around the country, demand for s’mores ingredients rose. No doubt, families were seeking pleasure by setting up barbecues in their backyards and roasting s’mores by the fire. Hershey said its chocolate sales were 40% to 50% higher in areas with an increased number of Covid-19 cases than areas that were lower.
“This past year, we noticed that wherever Covid case counts were elevated, we were seeing increased sales of s’mores ingredients and then we were able to use the case count trajectory as a foreshadow of where we should focus some of those efforts and build displays and put media in those markets,” said Buck.
Retailers are wise to the trends as well and have been stock up on candy for Valentine’s Day and Easter earlier than ever to make sure they have an adquate supply.
Hershey shares closed Thursday up less than 1% at $147.22 after reporting its fourth-quarter sales rose 5.7% to $2.19 billion. Net income climbed 41% to $291.4 million. Excluding items, Hershey earned $1.49 per share, outpacing analysts’ estimates.