Hershey’s has created a new summer candy season around s’mores treats through a partnership with Kraft Foods that boosts sales for retailers, earning SN's Supplier Leadership Award for Collaboration.
• Hershey’s created a new summer candy season around s’mores through a partnership with Kraft that now has bigger chocolate sales than Valentine’s Day.
• Hershey’s milk chocolate six-packs see 10% to 15% annual sales growth due to s’mores merchandising.
• Flexible display options allow retailers to switch out items for private-label products.
For most confectioners, there are four main selling seasons — Halloween, Christmas, Valentine’s Day and Easter — and the summer months bring generally sluggish sales.
However, Hershey’s has created a new summer candy season around s’mores treats through a partnership with Kraft Foods that boosts sales for retailers, and invokes a nostalgic feeling for consumers.
“I think it goes back to the simplicity of what s’mores is,” said Michael DePanfilis, Hershey’s vice president shopper marketing. “Each of the brands will get a lift but when you combine them together on the usage occasion, the sum is greater than the individual parts.”
Join the conversation on Twitter
Use the hashtag #SupplierLeadershipAward to tell us what you think and to follow the conversation.
Follow @SN_News on Twitter.
Since 2007, the company has worked with Kraft to combine Hershey’s chocolate bars with Honey Maid graham crackers and Jet-Puffed marshmallows in enticing in-store displays that have helped drive annual growth of 10% to 15% on Hershey’s milk chocolate six-packs.
The summer s’mores season “is actually bigger than Valentine’s for us as a company,” said DePanfilis.
Hershey’s chose to work with Kraft over other CPGs in part because the supplier sells both graham crackers and marshmallows, so the partnership only required one other company. (The split of Kraft Foods into Kraft Foods Group and MondelÄ“z International may alter the partnership slightly, but DePanfilis said there shouldn’t be any major changes or problems.)
The chocolate maker also recognized the consumer appeal of combining three popular, well-known, national products. “When you look at their brands and you look at our brands, we’re all dominant players in their respective categories. They have the No. 1 brands, we have the No. 1 brands,” said DePanfilis.
Such partnerships between two CPG companies are rare. Peter Hoyt, chief executive officer and executive director of the Path to Purchase Institute, said this is likely due to the competition between “separate sales organizations, separate merchandising organizations, separate marketing organizations. It’s tricky to pull these off.”
Hershey’s and Kraft work together and separately to make it easy for retailers to implement the s’mores merchandising concept in stores. Retailers have the option of a pre-packed display — available in three different sizes — that contains a set amount of Hershey’s chocolate bars and Kraft marshmallows and graham crackers, or a display-ready case that can then be paired with the retailer’s private-label products. The only condition is the retailer must display all three s’mores components together, regardless of what brands are used.
“And the beauty of our relationship is we allow for that flexibility. And because it’s still a win-win. It wins for the retailers, it wins for us,” said DePanfilis.
In addition to boosting sales for Hershey’s, the s’mores concept carries benefits for retailers and even consumers.
“It’s good for the shoppers, it’s good for the retailer, and it’s definitely good for the two manufacturers involved,” said Hoyt.
“This combination is more than just the idea that marshmallows and graham crackers and chocolate belong together. What they’ve really done is conjure up memories for every shopper. And that improves the shopping experience.”
Read about SN's Executive Leadership winner: Hormel Foods
According to Hershey’s research, baskets that contain all three s’mores ingredients are 91% larger than those that don’t, while just over 60% of s’mores purchases are impulse buys.
Different retailers have priced the s’mores ingredients in different ways, DePanfilis said. Some promote a discount for buying all three items, while others offer a special price just for loyalty cardholders or simply advertise the s’mores concept in ads.
“What we do know is, from Memorial Day through Labor Day for most of the country, that’s really around the s’mores occasion,” said DePanfilis.
Now in its fifth year, the Hershey’s and Kraft partnership continues to grow as it becomes more sophisticated.
“The three partner brands have increasingly focused on trying to win in-store and driving the synchronization of those three-ingredient merchandising solutions. And I think that’s where we’ve gotten much better penetration and much better utilization of graham crackers, marshmallows and Hershey’s milk chocolate,” said DePanfilis.
In the future, Hershey’s hopes to expand the s’mores season beyond the end of summer, such as during football tailgating, and eventually make it a year-round sales driver, DePanfilis said.
Read more about SN's Supplier Leadership Award winners.
| Suggested Categories | More from Supermarketnews |
 | |
 | |
