The Sweet Legacy of Hershey's: A Deep Dive into the Chocolate Giant

The speaker introduces the third installment of the 'Bigger Than You Know' series, focusing on companies larger than commonly perceived. Previous episodes featured Mars and Nestle, and this episode concludes the trilogy with a discussion on Hershey.

Milton Hershey founded Hershey's Chocolate Company in 1894, recognized as an inspiring figure in the chocolate industry. The speaker hints at a more detailed story about the company's early days to be shared in a future video.

The Hershey bar, created in 1900, and Hershey's Kisses, introduced in 1907, are highlighted as two of the most iconic products from Hershey, both having been popular for over a century. The speaker notes the introduction of variations like the Hershey bar with almonds in 1908 and Mr. Goodbar in 1925.

The evolution of Hershey's products continued with the release of the Hershey's Special Dark bar in 1939 and the Cookies and Cream bar in 1995. The speaker also mentions the recent introduction of Hershey's Cookie Layer Crunch, showcasing the brand's ongoing innovation.

The speaker emphasizes that Hershey's original products are easily recognizable due to their prominent branding, including the signature design and taste associated with the Hershey name.

In 2016, Hershey reported revenues of $7.4 billion, with a profit of $720 million, and a market valuation of $23 billion. The speaker notes that while Hershey bars are significant, they do not solely account for these impressive financial figures.

Hershey's growth is attributed to strategic mergers and acquisitions, including the 1963 merger with the Reese Candy Company, which has led to the successful sale of various Reese's products. The speaker lists popular items such as Reese's Peanut Butter Cups and Reese's Pieces.

In 1977, Hershey acquired Twizzlers, expanding its product range. Additionally, in 1996, Hershey acquired North American candy operations from Leaf, gaining brands like Heath, which includes the Heath bar and its ice cream topping.

Hershey has made several significant acquisitions over the years, including Brett Savers mints and Icebreakers mints in 2000, Brookside chocolate in 2011, and Crave jerky in 2015. Their most recent acquisition was Bark Thins in 2016. Notably, Hershey also entered a licensing deal with Nestlé in 1969 to produce Rolo in North America, and in 1988, they paid $300 million to acquire Cadbury's North American operations, which is a much larger brand in the UK. This acquisition allowed Hershey to dominate the North American market with Cadbury products, despite Cadbury's different recipes and offerings in the UK.

Hershey is a major player in the snack market, holding the second-largest market share at 7.5%. An article from March 2023 highlighted Hershey's strategy to improve top-line growth by broadening its presence in the $1 trillion global snack market through innovation and acquisition. While Hershey has successfully expanded its product range, including unexpected items like jerky and mints, there is speculation that to compete with larger companies like Nestlé, Hershey may need to venture into entirely new industries. However, it appears they are currently focused on further expansion within their existing market, which has been their strategy for over a century.

Despite its strong presence in North America, Hershey aims to expand internationally. The company recognizes that while it is a dominant force in the North American market, its global footprint is not as substantial. This desire for international growth indicates a strategic shift towards capturing a larger share of the global market.

In the discussion, it was highlighted that Hershey's reported a total of $7.4 billion in sales, with $6.5 billion coming specifically from North America. This indicates a strong reliance on the North American market, particularly in the context of their acquisitions and licensing agreements, which tend to focus solely on this region.

The speaker emphasized Hershey's commitment to innovation, noting that the company is not only pursuing geographic expansion but also actively creating new products to capture market share. Despite high expectations for the Cookie Layer Crunch, which was anticipated as one of the most significant innovations in over 16 years, it seems to have underperformed since its launch nearly a year ago. In contrast, the upcoming launch of Hershey's Gold, featuring caramel, peanuts, and pretzels, is set for December 1, 2017, marking a significant moment in Hershey's product history, as it is the fourth bar in a series that dates back to 1900.

The discussion also touched on the implications of Hershey's growth strategies for consumers. As Hershey expands, some existing snack brands may transition to being produced by Hershey, potentially going unnoticed by consumers. The speaker encouraged audience engagement by asking for opinions on Hershey's expansion plans and whether they would be trying the new Hershey's Gold bar, which represents a notable event in the company's long history of product launches.