Hershey (HSY, $108.17) To Make Chocolates Pricier, While Stacking Up New Products
Next year, it might get costlier to taste Hershey’s chocolates.
The chocolate maker is planning to raise prices of one-fifth of its products by around 2.5% in 2019. The company hopes that higher prices would cushion its rising costs of production inputs and logistics. Initially, Hershey had wanted to hike prices by summer.
In addition to price hikes, the company is focusing on digital strategies to milk a rapidly growing e-commerce market, while also adding new products and making acquisitions to boost revenues.
Chief executive officer Michele Buck indicated that the company’s association with SkinnyPop popcorn – following Hershey’s last year acquisition of Amplify Snack Brands – has turned out well for the company’s sales growth.
Also seeming to target an increasingly health-conscious population, Hershey announced this year that it would buy Pirate Brands from B&G Foods Inc. for $420 million. Pirate Brands makes apparently healthy snacks such as Pirate's Booty, Smart Puffs and Original Tings.
The company has also launched new products such as like Hershey's Gold (a "caramelized creme" bar with pretzels and peanuts baked inside) and Reese's Outrageous (a peanut butter chocolate bar with Reese's candy inside). Reese's Thins, a 40% thinner Reese's peanut butter cup, will be in stores in 2019.
Hershey revenues increased by +2.9% in Q3, compared to the same period last year.
