Not Just Desserts: A Conversation with Hershey's

(Image courtesy of The Hershey Company)

In Spring 2021, I took Concepts of Marketing with Hugh Morton Distinguished Professor Heidi Hennink-Kaminski. Dr. Hennink-Kaminski taught her students how to analyze past or present advertising efforts to predict marketing trends. For one of our first assignments, the class discussed Hershey's Kit Kat presence in Asia. Kit Kat incorporates local flavors such as Matcha to cater to local flavor profiles. Since that assignment, I realized that Hershey's is more than just desserts. Hershey is a titan of snacking industry that closely pays attention to subtle changes in the marketing tides. I had the chance to speak with Jeff Beckman, Director of Corporate Communications at Hershey's, to learn more about the company.

(Image courtesy of The Hershey Company)

1. What makes a Hershey's product different from others products on the market (specifically your milk chocolate bar)?

In the late 1880s, Milton Hershey, who had failed a number of times in the candy business, had finally made it with a caramel company that he had started in Lancaster, Pennsylvania. It's about 35 miles from where I'm sitting right now in Hershey, PA. He started dabbling in chocolate coatings, or what we called sweet chocolate coatings. But it's not what you would know as Hershey's milk chocolate today. He got the spark of an idea when he realized people liked the chocolate coating surrounding his caramels.

(Image courtesy of Milton Hershey School)

IIn 1893, Hershey traveled to the World's Fair in Chicago, Il. While at the fair, called The Columbian Exposition, he visited the Columbian Exposition and ran into German chocolate-making equipment from a German company exhibiting. After seeing how the machines worked, Hershey bought some of the equipment at the fair and shipped it back to Lancaster, Pennsylvania. Once back in Pennsylvania, he ordered more equipment and started moving towards creating chocolate by forming a sub-company in his caramel company called Hershey Chocolate Company in 1894.

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Hershey realized that chocolate was the future. He was a successful caramel maker living a comfortable life in a Victorian home in Lancaster, Pennsylvania. So, Hershey risked it all. He sold his caramel company and moved into a little farm in Derry Church, PA, where he was happened to be born. He then proceeded to buy the farmland surrounding his new home to create a factory. In 1903, he broke ground on a factory that was completed two years later

(Video courtesy of Milton Hershey School)

During this time, Milk Chocolate was a Swiss product. The Swiss chocolatiers introduced milk chocolate into the European dessert market. No chocolatier was going to share their secret recipe or the chocolate creation process. Hershey went back to his farmhouse, which is now called The Homestead, and through a process of trial and error, eventually figured how to make Milk Chocolate. The secret to this success is how a person condensed the milk. In the industry, many of the milk chocolates use powdered milk.

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Since Hershey found his secret, the company has continued to use only fresh fluid milk in our milk chocolate. Because the company is located within a hundred-mile radius of diary farms, Hershey wanted access to the freshest milk. People thought he was crazy for having a factory in the rural countryside. They told him to build a factory in Philadelphia, where everyone else was building a factory. But, he knew that the train lines could be built to where his factory is.

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Hershey's milk chocolate taste different than its European milk chocolate counterpart. Hershey's milk chocolate is made at a lower temperature, and European cook their chocolate at a higher temperature resulting in a more caramelized flavor note and a different flavor profile. Hershey's chocolate is darker because there are more total cocoa solids, and we only use cocoa butter in our chocolate. Europeans use other oils include shea, saffron, or sunflower, to create their milk chocolate. In the United States, the FDA would not allow a company to call a product one hundred percent milk chocolate if other oils are involved in the product's reaction. Europeans who taste a Hershey's Milk Chocolate (which is now the American standard) are surprised by the different tastes.

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The Brilliance of Milton Hershey, similar to Henry Ford, created a standardized assembly line to make high-quality and affordable chocolate. Before Hershey, a person would go to a candy shop and buy a piece of chocolate from large brick and weigh it, making chocolate a treat only for the wealthy. Hershey's democratization of chocolate made people of all socio-economic classes able to afford chocolate. From 1905-the 1960s, a Hershey bar cost five cents.

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2. How does Hershey's incorporate its mission and vision into all its product offerings?

Hershey's is a valued-based company. Milton Hershey was a man who gave up his lucrative caramel business for a long shot with chocolate, where he gambled and won. But, Hershey was not interested in wealth. In the two decades before his death, he gave his money away and created a trust to fund a school for underprivileged children that still exists.

(Image courtesy of https://www.inquirer.com/photo/photos-milton-hershey-school-through-years-20210528.html)) .

Our purpose is the idea of bringing moments of goodness to the world. Goodness refers to great-tasting products (although we are proud of the quality of our products) and means being an ethical company. We believe in sustainability and protecting our planet, and it's about givingback and engaging with our communities. This ethos seeps into all areas of our company. When sourcing cocoa from other parts of the world, we play a role in uplifting the lives of farmers how to grow the cocoa for our products. We help protect the environment when we make no-deforestation pledges and confirm our ingredients come from farming and agricultural systems that do not destroy forests and trees. We launched an agroforestry program to be a part of the solution and invest money to help plant trees in damaged agricultural areas.

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We view the world through the consumer lens. We engage with our customers when we listen to consumer feedback, anticipate and deliver their needs, and learn more about their mindset. We learned that consumers love the intersection of sweet and savory flavors, so we married those concepts to create new products.

(Image courtesy of The Hershey Company)

3. How has the company adapted to current and future societal values?

It's part of the reason why we are defining ourselves as a snacking company instead of a confectionery company. This distinction comes from knowing that a customer has a whole range of snacking occasions. We know that candy is not a center of the plate food item, and we would never encourage to have seven Reese's cups for dinner (it would be fun for a day but not be very sustainable). Our sweet treats are a treat, an indulgence, but there are so many other occasions that you can have salty sacks. This redefining process fits in with our customers' evolving needs and wants and engages with them for all their snacking needs. Hershey now as an opportunity to engage with customers with different flavor profiles and occasions.

(Image courtesy of The Hershey Company)

Last year, we acquired Lily's. Lily's is a low sugar/no sugar added candy confectionery brand. The consumer lenses allow us to constantly be empathetically engaging, talking, and listening to what consumers need. We can channel the future by evolving your portfolio to be relevant at any given time.

4. How does Hershey engage with different companies and maintain its brand equity?

There is nothing more American when it comes to confectionery brands and companies than The Hershey Company. Although we've shared our products now with the world, we have a very strong and growing international business. Reese's Brand has been growing at an incredible pace outside the United States and was the first brand to exceed over a billion dollars in sales and the first billion-dollar candy brand.

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When a person travels to Europe, they find that European chocolatiers historically used hazelnut in their chocolate/nut combination. Reese's Brand has introduced people across Europe to the magic of combining peanuts/peanut butter with chocolate for the past decade. We work with Dairy Queen or McDonald's, where customers can find Reeses' Pieces Blizzards or Kit Kat Mc'Flurries. When you go to other restaurants chains to have dessert, you know the dessert will most likely have Hershey's natural cocoa or syrups as a key branded ingredient.

(Image courtesy of The Hershey Company)

5. What is the future of the company?

Despite the challenges of a COVID, a pandemic that our world hasn't seen since the 1918 Spanish Flu, we have had phenomenal years in both 2020 and this year to date. People are learning to live through this pandemic and learning new normals. People find comfort in our products that they know and love their whole lives and associate with family get-togethers. As we hunkered down for the past eighteen months, many people took up baking and using our ingredients to create recipes. Our short-term future is very bright as we see in every month and quarter sales results.

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We are setting the foundation to become a significant snacking powerhouse in the future. When a person looks for a snack, they will know that The Hershey Company will provide high-quality candy and pretzels, popcorn, protein bars, and more.