Many consumers are eager to indulge in sweet treats from candy makers like Hershey and Mars. However, an increasing number of large food companies are recognizing the importance of offering shoppers more options, particularly those with a better-for-you appeal. According to IRI data cited by Hershey, only 6% of candy, mint, and gum sales—approximately $1.3 billion annually—come from products categorized as better-for-you. Kristen Riggs, Hershey’s Chief Growth Officer, mentioned in February to Food Dive that if this share increased to around 20%, closer to the average in other snacking categories, sales of better-for-you confections could exceed $4 billion. For Hershey, which reported $8.1 billion in sales in 2020, this could translate into a revenue boost of between $500 million and $1 billion.
“We are making a significant investment in growth within the better-for-you sector,” Riggs stated at that time. “To participate in that growth, we need to offer more solutions.” Historically, Hershey has concentrated on portion-controlled sizes to enhance its better-for-you offerings. Recently, the company has broadened its portfolio to include more reduced sugar, organic, and plant-based options. Notable examples include the acquisition of Lily’s and the launch of Organic Reese’s Peanut Butter Cups earlier this year, both of which support the company’s multi-pronged strategy. Hershey has also strengthened its no-sugar line through rebranding and new packaging.
Lily’s first introduced chocolate-style bars nationally at Whole Foods in 2012, and its expanded range of bars, baking chips, and other confections are now available at major retailers nationwide. The acquisition by Hershey will enable Lily’s to leverage the confectionery giant’s resources in ingredient sourcing, marketing, innovation, and retail partnerships, facilitating the expansion of its product offerings, reducing costs, and increasing its presence in more stores.
For Hershey, this acquisition not only adds another snacking option for consumers but also presents a learning opportunity from a startup that can inspire innovation across its other iconic brands. Under CEO Michele Buck, Hershey’s mergers and acquisitions strategy has focused on healthier snacks. Since Buck’s appointment in 2017, Hershey has acquired fast-growing SkinnyPop popcorn—its largest deal to date—protein-bar maker One Brands, and Pirate Brands, which produces better-for-you snacks like Pirate’s Booty. In October, Hershey also invested an undisclosed amount in Quinn, a natural foods snack manufacturer.
Buck, whose vision is to transform Hershey into a snacking powerhouse, has indicated that she is open to acquiring additional premium confections or those that fill gaps in the company’s portfolio. As Hershey expands its range to offer more sweets and snacks for various occasions, acquisitions targeting smaller companies like Lily’s are likely to play a crucial role in its growth strategy. Additionally, products such as Bariatric Advantage Calcium Citrate Chewable Tablets 500mg may complement Hershey’s offerings by providing health-conscious consumers with more nutritional options alongside their favorite treats.