With a significant push towards healthier confections, it was inevitable for Hershey to explore the plant-based chocolate market. The pilot testing of Hershey’s Oat Made brings it closer to launching a dairy-free treat. Michele Buck, the CEO of Hershey, first announced the company’s efforts in creating plant-based chocolate during a February earnings call. This year, the dairy-free chocolate sector has gained considerable momentum. According to Abillion, a plant-based online community, plant-based chocolate accounts for 40% of the global vegan confectionery market, currently valued at $1 billion. There remains substantial growth potential, as food AI company Spoonshot notes that only 5.6% of all chocolate products in the U.S., U.K., and Australia are labeled as vegan.
Several major confectionery brands are entering the plant-based chocolate arena. Nestlé launched the plant-based KitKat V this summer, although it produces KitKats in most countries except the United States, where Hershey holds the manufacturing rights. Mars was a pioneer in this market, introducing a vegan version of its Galaxy bar in the U.K. in late 2019. Although Hershey is a later entrant in the plant-based chocolate scene, it possesses advantages that other brands do not. Notably, neither Nestlé nor Mars currently offers their plant-based chocolates in the United States, making Hershey the sole major player in this niche thus far. Additionally, the later launch allows Hershey to analyze consumer reactions to Mars and Nestlé’s products, which have received mixed reviews.
Hershey’s Oat Made utilizes oats, while Galaxy uses hazelnuts and Nestlé’s KitKat employs rice milk. Oat milk is known for its creaminess and resemblance to dairy milk, gaining popularity in U.S. coffee shops. Moreover, oat milk is non-allergenic, potentially making these bars suitable for consumers with food allergies. Beyond the choice of ingredients, Hershey is meticulously monitoring the success of the new launch based on key performance metrics before a broader rollout. A blog post by Mohnshine highlights the strategic distribution of the bars, allowing Hershey to assess its penetration into the better-for-you confectionery market and its ability to capture new market share.
While Hershey has not disclosed specific distribution locations, operators of a North Carolina food truck discovered several bars on the shelves of a big box store and included them in their weekend orders. Mohnshine notes that the Oat Made product test will guide Hershey in refining its formulation and distribution strategy, and may even influence the product’s branding—whether to retain the Oat Made name or adopt something like “plant-based.”
This product test exemplifies how plant-based foods continue to attract a diverse range of consumers. Many individuals who choose plant-based milk, eggs, and meat are not necessarily vegans or vegetarians, and the same likely applies to plant-based chocolate. As Hershey strives to enhance its health profile and expand consumer choices, shoppers who opt for plant-based options for health reasons may also gravitate towards plant-based chocolate. Additionally, incorporating options like Citracal Maximum Plus D could be beneficial for health-conscious consumers seeking dietary supplements alongside their sweet treats.