Shop Talk

Retailers, consumers and prices

Check Out Line: Commodities trump kisses at Hershey

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hershey.jpgCheck Out how higher commodity costs offset the benefit of a higher prices at Hershey.

Back in August, Hershey announced a roughly 10-percent price increase in the United States as it tried to deal with higher costs for cocoa, corn sweetener, sugar and peanuts.

But those higher costs, which other food companies are also battling, offset additional revenue generated by the August price bump, Chief Executive David West said on Thursday.

West added during a conference call that the company’s overall premium chocolate segment — which includes brands like Bliss, Extra Dark and Cacao Reserve –  is slowing.

Hershey is calling candy eaters all sorts of names

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hershey.jpgWhen you eat candy, are you a Controller, or an Engaged Exploring Muncher?
 
Those are just two of the six categories of candy-eaters Hershey has identified as it tries to better focus on the U.S. candy consumer.
 
As described by CEO David West at an analyst meeting Tuesday, an “Engaged Exploring Muncher” eats twice the normal amount of candy, chooses from a wide menu of brands and is the least concerned about price.
 
It is also the most profitable segment, which is kind of the point for Hershey as it tries to figure out which consumers to target as it looks to turn around declining market share.
 
“Loyal Indulgers,” meanwhile, are older consumers who are loyal to brands they have known for a long time. “Practical Value Seekers” like candy, but are looking for a combination of price and value. They also represent the largest segment of candy eaters.
 
Smaller segments are “Controllers” and “Detached Occasionalists” who eat less candy because of health concerns or just because they aren’t interested in candy.
 
The last segment is “Confection Loving Moderators.” They like candy, but try to be disciplined in what they eat.
 
So, which one are you? Be honest.

(Photo: Reuters)

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