Hershey is taking a big step away from candy
Thomson Reuters
For most people, Hershey conjures up images of chocolate bars and peanut-butter cups. Soon, however, the company hopes these visions also include protein "squeezes" and snack bars.
Hershey is expanding its snack business in 2016, with special attention to health products aimed at nutrition-savvy consumers.
The company is revving up for its regional launch of the SoFit brand, with fruit and protein squeezes, snack squares, and nut and seed packets. The healthy snacks are already available on Amazon.
The new line joins the company's recently launched Brookside fruit-and-nut bar line (part of the Brookside chocolate brand) and jerky maker Krave (which Hershey acquired last year) in the company's new and swiftly growing snack division.
Hollis Johnson
"We understand that consumers' relationship with food is changing," Marcel Nahm, vice president of Hershey's snack division, told Business Insider. "Consumers are more than ever interested in knowing what they put into their body, where does it come from, how does it get there ... Consumers want more and more choices."
The unexpected new pushers of healthy snacks
Hershey is far from alone in its drive to get in on the exploding healthy-snack market.
CVS recently debuted a protein smoothie and chia seeds, as well as expanding its Gold Emblem Abound "better for you" brand. Mondelez, the parent company of Oreo and Cadbury, announced in September that it is focusing 70% of new product-development efforts in the next five years on healthy goods.
In other words, healthy snacks are hot — and these companies' less-than-healthy iconic products are not.
In October, when reporting third-quarter earnings, Hershey cut its forecast for the fifth consecutive quarter. As shoppers become more health-conscious, sweet treats are bearing the brunt of their newfound healthy lifestyles.
At the same time, snacking is exploding. Nahm says that the average consumer's diet is no longer three square meals — it's a jumble of snacks, mini meals, and meal replacements.
"We need to satisfy as many occasions and needs as we can," he says.
Can Hershey mean healthy?
Hershey believes that its confection-filled history gives it a unique advantage against the competition.
Consumers "are somewhat frustrated because they either have snack bars that have a good nutrition profile and taste like cardboard, or they have snacks that taste great, but might as well eat a candy bar," says Nahm.
He says Hershey, unsurprisingly, understands the value of taste. It also has the experience and resources to market new products, collect and analyze consumer data, and strike deals with retailers.
Hollis Johnson
But in the snack division, Hershey wants to follow the model of Krave, founded in 2009. LikeBig Beer adopting craft's marketing techniques and presentation, Hershey wants to allow new, healthy brands to start small — like SoFit's regional rollout — and stand alone.
"Many people don't really know where this brand or that brand comes from," Nahm says, when asked if people will trust Hershey to be healthy. "For us, brands individually need to connect with people emotionally."
Nahm believes that SoFit's and Brookside's snacks' balanced and transparent approach to health will win customers over. Instead of attempting to fit into specific trends or appeal to the über-health-obsessed market, he says that Hershey's snacks will fall somewhere on the spectrum between "health master" and "family pleaser."
New, less-healthy snack options like the sweet-and-salty Hershey's Snack Mix and Reese's Spreads Snacksters fall much closer to the family-pleasing side of the spectrum. Brookside bars are made of fruits and nuts, but also contain a base of chocolate or yogurt — yogurt is rolling out later this year. Instead of overdosing consumers with pure protein, the protein squeezes include fruit for what Nahm calls a more complete protein — as well as the taste.
Nahm describes the average consumer as seeing his or her life as a rough series of nutritional pluses and minuses. Fresh fruit or a snack of pumpkin seeds would be a plus. A donut or a chocolate bar would be a minus.
Traditionally, Hershey's has built a portfolio of nutritional minuses. These new snacks are a chance to sell some pluses — if customers bite.
With the company planning to acquire and develop more in-house snack brands, Hershey's venture into the healthy-snack market has just begun.
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