With an extensive global presence, Hershey is one of the world’s most favorite chocolate brands, loved by adults and children alike. Popular candy brands like KitKat, Twizzlers, Almond Joy, etc. form its portfolio. Hershey’s net sales increased by 4% in the fiscal third quarter. Earlier in January 2021, Bank of America upgraded its stock to buy and elevated the price target by 13% from its current trading price. The company has a market cap of $31 billion.
One might argue that it was easy for a successful and popular company like Hershey to weather the pandemic blues and achieve this milestone, but the truth is not so simple. The company had taken a number of definitive steps which helped it to surpass its previous year’s sales figures despite the economic downturn induced by the pandemic. Here are five actions that enabled Hershey to pump up its sales.
- Spotting a consumer trend through tracking and analysis
In the early months of spring, Hershey identified a strange sales pattern emerging. The company experienced an online spike in one of its product sales. Sales of these six-pack milk chocolates usually pick up in early summer but in 2020, when the lockdowns kicked in, the products started flying off the shelves.
On investigation, Hershey saw that the regions with higher Covid-19 cases, were witnessing 40-50% rise in sales of the said product, compared to other areas. They found that confined to their homes, consumers were making treats in their backyard using the chocolate bar to break the monotony. Identifying this change in consumption pattern and retail signals quite early, enabled Hershey to make the required business decisions that ensured the company took optimum advantage of the opportunity.
- Conducting experimental surveys to predict possible sales trends
Hershey sensed a change in consumption pattern was in the offing when the Covid-19 pandemic took hold. Hence in the early period of the pandemic, they shipped considerable volumes of all their snacks to a customers’ focus group. In return, the customers told Hershey how they were using the snacks – whether they were putting those in candy bowls, using them for a baking recipe or having them as a snack in between work.
When these reports came in from the focus group, Hershey executives used those insights for creating an informed business strategy.
- Moving with agility while adjusting its products portfolio
Tracking data, identifying trends and predictive analysis is only helpful when these relevant insights are taken to the right business team and required decisions are taken followed by actions. Hershey moved with extreme agility and adjusted its products portfolio and subsequent production very swiftly. This enabled Hershey to transform predictions to increased sales.
- Apt product placement in relevant sections of online platforms
Due to the pandemic, lesser consumers were visiting retail stores, which meant they couldn’t see lavish product displays and there was no chance of impulse purchase of chocolate bars. The company thus got savvier with its online strategy and started pairing its products with other purchases like placing an ad of Hershey chocolate syrup near an assortment of ice-creams. Placing an ad of baking supplies or candy near Christmas related merchandise also helped Hershey to spark online sales.
- Continue product promotions as per the season
Hershey succeeded in spiking its sales during the Halloween and Christmas festivities. Taking a lesson from the sales trends in the recent period, Hershey is planning similar online strategy for Valentine’s Day celebrations and expects its lucky streak to continue.
These five business actions resonate the requirement of the current times. Any company, no matter its size can use these insights to embark on a growth trajectory in the “new normal”.