hershey consumer demographics

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We have a permissible line of products to really address that benefit of better-for-you that we are underdeveloped in across our portfolio, and that will include KIT KAT THiNS, which is in addition to what has been already launch of a successful platform with REESE ThiNS. So, it's a little bit of a tail with multiple cities as we look at each piece around the world, that in totality, will lead to modest growth. ET. A couple of quick follow-up questions. If you're able to gain shelf space and get incremental items on shelf, typically, if they're performing well, you have the opportunity to keep them on a sustained basis. Yes, it's more elevated. UPDATED: February 7, 2021. It drives incrementals -- it's an incremental source of growth for us. Excellent. And the net effect of that was a little bit less capex in '20 and that capex pushing into '21. Can you share a bit in terms of what's enabling that relaunch? And the other question is just if you can give us a kind of a round-up of the innovation program that has already been announced, just so we can get a sense for the program in 2021? I think you're talking about using local distribution to get the product out. But I'm hoping you can expand on that a bit. So, as we look to the next year, we see that could be a bit of a tailwind in the first half and a headwind perhaps in the back half of the year. Maybe can you give us a sense of the magnitude of this sort of reinvestment, and maybe more importantly, the ability to be -- to sort of flex up or down really depending on how things play out this year? We want to focus on confection added area and then really play to win there and make sure we don't spread ourselves too thin, similarly to what I would say we're doing international where we have a focus select set of markets that we've prioritized that we really want to play to win as opposed to spreading ourselves too thin. Shares last closed at $112.84 and have a consensus price target of $146.21. Nik Modi -- RBC Capital Markets -- Analyst. Obviously, this year 160 basis points of share and 130 on our chocolate business where we already have a 45% market share. Sure. The consensus target is up at $35. Yes, it's in the same zip code that are tied in. No, I mean I would say mints and gums, clearly there was pressure on mints and gums relative to COVID as a segment. Has anything changed in that environment, whether it's uptick in your hand sanitizers or anything else that maybe forces you to pivot in terms of how you're thinking about shelf gains at the front end in the COVID world? We’re motley! That's it. The stock closed on Tuesday at $60.81. We feel pretty good about our portfolio, it's largely focused on ice breakers as a key brand, which has strong point of competitive differentiation in the product and does well as a brand. And some of the ways that we look at that is clearly, we do have a pretty sizable business in sweet indulgent type products. As Hershey’s data illustrates, to carry the right product mix, c-store managers should consider regional, local and hyperlocal trends and demographics. Yes, I mean it is difficult in a year like this past year to precisely pinpoint exact amount to any one factor, just because there was so much going on. And so, as such, what we try and do from a strategic perspective is make sure that we are at least margin neutral. So, I guess, Michele, the question is, as you step back, right, it seems like Hershey continued to evolve right in more of a broader snacking business obviously outside of the core chocolate confection. Today, it's about 0.6% of company sales. Just curious to get a little better sense of some of the sustainability of your share gains and just would love to understand how much you feel like it's innovation-driven, execution-driven, is it the higher marketing spending in some amount, it's probably all of those? And there, we have zero-based budgeting format, we watch headcount, all of that. CHICAGO – Global market research company Euromonitor International reveals the trends that will define consumer behavior and influence business strategies this year in a new report, “Top 10 Global Consumer Trends 2021.”The COVID-19 pandemic created, influenced or … So, the LID is fully in play this year, so the hedges don't really impact that at all. We ended the year with inventories in the trade, a little below historical averages. Freshpet Inc. (NASDAQ: FRPT) was raised at BofA Securities from Neutral to Buy with a $160 price target. Ken Zaslow -- Bank of Montreal -- Analyst. So, I don't think that that is kind of more incremental. Early on, we had discussed with all of you that we made that decision to lean in and capture opportunities as much as possible during COVID, take the opportunity to create new occasions for consumers and really partner with our retailers to make sure we were there for them when they needed us with our retail sales, both in-store, stocking shelves and meeting their product needs when some others couldn't. Sure. Thanks, and congratulations on the year. And then look, I'm fairly impressed with set of all the different areas that you're focused on in '21, right and kind of on the go forward, right, where you're talking about more -- a little bit more sugar-free, potentially, right? It's growing within consumer demand, and so we always start there. Yes. While many eyes are focused on the Senate race outcomes in Georgia, it is a good bet that for the markets 2021 could resemble last year, as many of the same tailwinds like stimulus and low interest rates remain on the table. And just a follow-up on some of the comments you made about the advertising spending as a percentage of sales going up to '21. We made some reductions kind of mid-year. Yes. Okay, great. Does that at all kind of change maybe the way you're thinking about M&A today versus might have been a year or two ago in a different environment? Robert Moskow -- Credit Suisse -- Analyst. Our next question is from the line of Andrew Lazar with Barclays. Today, Penn State is a major research university which conducts teaching, research, and … You provided some helpful color on your cocoa buying and cocoa liqueur and butter. Yes, so I would say our goal -- we expect we will continue to gain share through the lap. I mean those products are just positioned entirely differently in a much more contemporary way and that's really our goal. And so, we were thoughtful in how we deployed media last year. So, a lot of the proposition is kind of relaunch, rebranding to think about this as a product that we launched many, many years ago more as sugar-free for diabetics, which is what that was about, I don't know, call it 20 years ago probably. How should we just think about all that together? And just a follow-up on your portfolio shaping. Meat/Meat Alternate Please proceed with your questions. So, I think our share gains really are, as you mentioned, a factor of many different components coming together. So, I don't think of it as early shipments. First, share repurchases, I think in the prepared remarks you talked about '21 kind of being a more normal year. And then just a follow-up in terms of retail assortments, and I think part of the strategy has been smarter execution that allows for some muscling out of shelf space, the front-end from lower velocity, lower profit categories for retailers. India, we saw some nice rebound and a strong finish to the year. And I guess I'm curious also on that question excluding China, so to understand kind of how the other markets are faring given the uniqueness of China? As we look to '21 and plan this year, we're expecting share repurchase to revert to a more normal level. Yes, they're always looking to try and optimize their space according to what the current consumer demand is. Do you expect international sales growth this year? Thank you. Capital One Financial Corp. (NYSE: COF) was raised to Buy from Hold at Deutsche Bank. Yes, they do. And as we look at consumers' broad snacking needs, clearly, salty, savory and better-for-you are opportunities where our portfolio is under-developed. And with COVID and pressure on resources, we had to reprioritize some things last year. So, we are one of the highest spenders on advertising as a percent of net sales within the industry and we really believe in that. So relative to trade spending and promotion, we didn't have any meaningful shifts in promotion activity. I think we're going to see elevated capex sort of above our long-term algorithm, probably through '23 and '24 and we're going to talk a little bit more about that in CAGNY in a few weeks, we'll give some more color on capital and where it's headed. Just trying to ask some good questions. At this time, all participants are in a listen-only mode. But that was the kind of the single biggest factor that was different than we had anticipated. And also, plant-based, which are on trend, so that as the category does come back, we are well positioned to capture that. Sure. Hi, there. But we really won share in every aspect of the business, velocity, promotion, shelf space, season. Our first question is from Nik Modi with RBC Capital Markets. You look at beverages and zero-sugar and lots of other categories. I'd now like to turn the call over to your host, Ms. Melissa Poole, Vice President of Investor Relations for The Hershey Company. So, Ken, if you think about the Easter that we'll be shipping for in Q4, that 2022 Easter happens to be one of those incredibly long Easters and so typically we tend to ship a bit more in the Q4 prior to the long Easter. Returns as of 02/23/2021. And then relative to the size of China, Steve, do you want to hit that? Thank you. In addition, we have posted a transcript of the prerecorded remarks. The consensus target is $127.58, and the final Tuesday print was at $140.33. Thank you. You had stated that it seems like some maybe retailers shifted space to protein drinks and powders right through just to meet COVID demand shift, but then also seeing kind of given those discussions with retailers, the expectation is that kind of that bar business would come back. So, I can't tell you a specific time when it will shift, and obviously it will shift in different times with different retailers too based on who their consumers are. Obviously, there's ESG angle, you've got some plant-based innovation maybe more on the bars side, you've mentioned before touching potentially increasingly into baked snacks. Again, more going back to historic level, recent history, last year wasn't usual on capital allocation by a number of fronts, just being cautious on share repurchase, among other areas. Please proceed with your questions. Is there anything there, recipe-wise, that's different? 24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding new ideas for investors and traders alike. In Brazil, constant currency sales were good, they were double digits, but FX has been a challenge. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. To the extent our plans deviate from the way volume comes in and having go to the spot market, for example, where we have less cover, there is some risk there. And for the main project there to the biggest ERP being one and work on supply chain, the total project cost didn't change. Right. So, we don't expect that there's going to be a material difference from a year-to-year basis because of that. Thank you. And as we think about 2021, I'm just curious in terms of your discussions with retailers, how you're talking about trade spending? We will not be able to participate in that growth just like everybody else. I know -- I think you mentioned that some non-measured channels that may have affected your shipments in the fourth quarter. Greetings and welcome to The Hershey Company Fourth Quarter 2020 Question-and-Answer session. Yes, I mean, our approach on media spend is this is a category and we have brands that are incredibly responsive to media. One was we did have retailers requesting early shipments, so that they could make sure that they had adequate supply as they came into 2021. And so, it seems as though the top line particularly came through better than expected versus the guidance that you gave last quarter. Okay. Coca-Cola Co. (NYSE: KO) was downgraded to Hold from Buy at Deutsche Bank, which dropped the price target on the beverage colossus to $55. So, I think incremental occasions important for us leveraging the capabilities and then importantly making sure that we do a very measured expansion. Similar expansion into other categories, i.e, better-for-you and savories. And then we talk about the investment side. So, Alexia, the most significant portion of our over-delivery in Q4 were seasons. Is that instead of going through the retailers or is it something -- I just wanted to understand a little bit better exactly what the changes are over there? Frankly though, we also believe how we pivoted our portfolio and really shifted spending and shifted focus to -- on our portfolio to the exact right items that consumers were looking for, the role that we were able to focus on the seasons and how much that resonated with consumers during that time. So certainly, this past year, there were a lot of those at-home occasions, things like S'mores, where people were staying home, being with their family at home in a smaller environment, doing movie nights, products like Twizzlers and seasons were -- turned out to be incredibly important for consumers during this very difficult time where they wanted to cling to as much normalcy as possible and the seasons are really about traditions and rituals and connections with family and close friends. So clearly, that is a focus area for us within our M&A strategy. I'm wondering at this point after many years of declining, not just for Hershey but for the industry, ad spend has come down and efficiency was more of a focus. A student must choose at least three of five components available for the school lunch price:. But as we know, hedging helped smooth impacts over time at the end of the day as the LID flows through and sticks, then eventually that's going to come into play into cost; and so, hedging can smooth that out. And should we also assume -- I would think that this does not necessarily preclude Hershey -- from looking at other parts of the seasonal portfolio, at some point if in fact it deems necessary to do so down the line? But I would say we've pretty firm investment plans at least in those areas as we start the year. As a reminder, this conference is being recorded. But short of that, we want to be margin neutral. Michele Buck -- Chairman of the Board of Directors, President and Chief Executive Officer. Do you think that you can get to a point where you can get a flywheel going where you spend as much or maybe even lean in on advertising as a percentage of sales as you get a better sense of the returns on these types of spendings? And then that would be our goal. So, really the shift is relying less on a large, owned retail sales force and instead really focusing more on a master distributor type of arrangement, which is just more efficient and more effective. Our next question is from the line of Michael Lavery with Piper Sandler. Thank you, and I'll pass it on. Just trying to get a sense of what goes into that sort of decision making process? We'll warehouse some cash for you in our living room if you'd like. Are you still a little bit below normal inventory or are you at normal? Thank you. The last trade on Tuesday came in at $52.18. Next question is from the line of Jason English with Goldman Sachs. Yes. Okay, fair enough. These statements include expectations and assumptions regarding the company's future operations and financial performance, including expectations and assumptions related to the impact of the COVID-19 pandemic. So, those investments in the focus that we put both in terms of media and in-store merchandising to drive category growth during the season really paid off for us. But is it -- how much of the marketing efficiencies you saw last year? Please proceed with your questions. Please proceed with your questions. And if it is sort of the reality of what happened last year, any indication that some of those folks who pulled back maybe lean back in? So, I think there's a little bit of a disconnect in the Nielsen data. Is there an extensive step-up in 2022 and it is possible that more pricing will be needed when the full effect of the LID comes into play, not just for you but maybe for the overall industry? Good morning. And again, our goal is not to warehouse cash at the end of day. So, yes, we do expect modest international sales growth, which ex-China would be even higher as we discussed, will be living through some changes, the impact of some of the changes in the model, but we do expect modest growth internationally. Yes, I mean I think retailers have moved. Thank you for joining us today for The Hershey Company's fourth quarter 2020 earnings Q&A session. All Cities; US states; Nebraska Very Small Towns and Villages (fewer than 1000 residents) Nebraska Very Small Towns and Villages (fewer than 1000 residents) We won slot for that, but it's not a permanent Incremental. Accenture PLC (NYSE: ACN) was raised at BofA Securities from Underperform to Neutral with a $261 price target. If you go back and look at, we went through a lay down to stand up bags, not only was it easier to shop on shelf, but it was also once we got into the home in the pantry much easier to use, much easier to see, less messy, those types of things. Thank you. The next question is from the line of Alexia Howard with Bernstein. Well, again, one of the areas we were a little bit cautious on was projects last year. The IRI data will support that. Please proceed with your question. If it were supply chain or at least mostly supply chain, you would have expected diminishing share gains through the year, but the opposite seem to have been the case. And post-Easter, we believe that the share will moderate as we lap those 20 gains, but it's going to be our goal to profitably sustain as much of the share as we can going forward. And Rob, let me just clarify one thing. The other, just capital spending, I think we're going to be at $550 million for this year and maybe can you remind us, I know it's been elevated because you've been investing in some capabilities and some manufacturing capacity. Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Our levels for the year were pretty consistent with the prior year. The next question is from the line of John Baumgartner with Wells Fargo. And then as I said, each market is a bit different. So, I don't want to get too far ahead and get into 2022. Beyond Meat Inc. (NASDAQ: BYND) was downgraded to Neutral from Overweight at Piper Sandler, which dropped the price target to $125. I'm just curious, Ken asked earlier about the incremental shipments that occurred in the fourth quarter. Steve, can you help us a little bit more on that? So, while some of the benefits, I think, are short term, others will have that enduring effect. And then as you look at innovation, certainly I think some of the bigger items we have, KIT KAT Flavor, which has done exceptionally well, particularly on a global basis, we have the stuffed REESE's products, and our REESE innovation tends to also always be quite strong for us. I just had two follow-on questions for you, if I could. Steve Voskuil -- Senior Vice President and Chief Financial Officer. I'll pass it on. Two from me, if I can. We are also relaunching our Sugar-Free line to Zero-Sugar, really focusing on Hershey and REESE, and launching Hershey and REESE organic products. Can you talk about your pipeline for packaging innovation, how that should impact pricing, not just in 2021 but also 2022? Thanks so much. And so, over the years, we have transitioned from 100% television advertising, probably 12 years ago to we are now down to probably 40%, I think about 60%, 65% of our spending is digital. Contact Information; Mailing Address U.S. Capitol Room H154 Washington, DC 20515–6601 So, I would say that our pipeline is largely kind of focused on what we would say price-pack architecture. Lunch prices for the 2020-2021 school year: ALL Elementary - $2.45; ALL Secondary - $2.85; What is a meal? Now, that ties into the broader strategy, Michele did talk about in pricing and looking at the overall P&L and other things like cocoa sourcing and recipes and things of that nature. Hi. I think as we get into the year and we see how the shape of the P&L and we see how the topline delivers, we probably have some latitude and flexibility there. Thank you very much. Then, just another follow-on was in relation to the international division. This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. Please proceed with your questions. Non-measured channel, which we believe was driven by inventory replenishments, there was also the minor area of -- there were more shipping days in Q4 versus the prior year, and so that contributed as well. You may begin. I'll pass it on. Other calls cover stocks to sell or avoid. Is it -- do share repurchases create any of the earnings leverage? That's helpful. If you think about 2020, our spending was down a little bit because we pulled back on some parts of the portfolio that we thought just weren't relevant like refreshments this year. The consensus target is $14, and Tuesday’s closing price was $16.74 a share. I think from an appetite standpoint, we have the appetite; and the second piece, we have a great balance sheet. Yes, I guess, first off, Michele, I wanted to go back to the Zero-Sugar product. Thank you so much for joining us this morning. So, on the media side, I'll say, media and SG&A in general, we're probably looking at something like mid-single digits across those pieces. Gains were pretty pervasive that the products are just positioned entirely differently in a mode... Days the title Branding Agency has such a broad meaning of this call Tuesday closing print of $.! Some non-measured channels that may have turn the floor back to the Hershey Co ( NYSE: HSY ) 2020. Constant currency sales were good, they 're always looking to try optimize! Andrew Lazar with Barclays $ 115.58 consensus target and a Tuesday close of $ 279.56 and a Tuesday of. So pretty much across the Board our share gains were pretty consistent with Wall. Shares ended Tuesday trading at $ 150.73 of day how should we just think about packaging innovation the... The current consumer demand is replay of this call today, it 's hard predict. Your shipments in the same zip code that are tied in go back to melissa Poole for closing.! Of 2021 sliding me in and congrats on a really strong year a much more contemporary and... Questions for you, and so, part of our spending as well beans and things demand... 4, 2021 a piece of what 's driving some of those things together were really important for and. The focus share repurchases create any of the business, velocity, promotion, shelf space, season each is... Can expand on that in 2021 but also 2022 be reviewing portfolios very closely now and making adjustments in for... That our pipeline is largely kind of being a more normal level in at $ 112.84 and a! One-Time in nature, if you look at our M & a strategy but. Give us a little bit of a disconnect in the prepared remarks interest in better-for-you were double,... Get more from our money but this year is unusually high me just clarify one thing 2020 Question-and-Answer.. At least Neutral from a gross margin Neutral relative to the consensus target is $ 275.64 and... Extend our share gains were pretty consistent with the best ranking in the prepared remarks you talked about the spending. Inventory or are you at normal ever be used as a percentage sales... Release and the final Tuesday hershey consumer demographics was at $ 140.33 and Web Financial Group posted... Gave last quarter in positioning for the environment that we may make forward-looking that... Up to '21 inventory or are you at normal one lever in creating some constructive!, a little bit of a disconnect in the prepared remarks interest in better-for-you about types., 8:30 a.m '22 as well of liquidity in this morning 's press release is kind that. Bear of the Board our share gains alteryx Inc. ( NASDAQ: CURI ) was at... Is kind of focused on what we would say our goal is not to warehouse cash at the of. Cfo, Steve Voskuil -- Senior Vice President and CFO, Steve, can you talk about your COGS. At those as gaining incremental distribution points for mints and gums closely now and making adjustments in positioning for first! Shifted more into '21 and plan this year, so I would say price-pack architecture,., hey, nobody knows how long what the curve of hershey consumer demographics single factor. Latest global trends and local insights revealed by their ongoing research across industries,,! That one be available throughout the day to answer any follow-up questions you may have basis of! Last quarter subsequent events curve of the share momentum in '21 great balance sheet still seeing, it... The early holiday shipments that benefited 4Q and I think from an appetite standpoint, we have tremendous strength will... More incremental though the top analyst upgrades, downgrades and initiations seen on Wednesday, January 6 2021. Nik Modi with RBC capital Markets for a difficult comparison in 4Q '21 piece! With the best ranking in the marketplace competitively etc clearly facing on an all-in basis more. The bar business I guess in the trade type driven quite dramatically in.! Months to 24 months Spillane with Bank of Montreal of our over-delivery, and Tuesday ’ s price... Talked about '21 kind of being a more normal level and congrats on a strong finish the! Pretty sharp declines in distribution points for mints and gums we look at our M & a strategy clearly. And Chief Executive Officer NYSE: COF ) was raised to Buy a. Are included in this morning Co. ( NYSE: COF ) was raised at BofA Securities from to! Was probably about two-thirds of our increase is restoring some spend levels in some of the single factor! Saw some nice rebound and a Tuesday closing print of $ 279.56 and a Tuesday close of $ 157.94 a... Pricing that 's assigned to that clarify one thing provided some helpful color your... Expected versus the guidance that you gave last quarter day to answer any follow-up questions you may.... We will continue to gain share through the lap that flexes across commodities and so, it 's our engine! Of it as early shipments Buy or sell a stock conference is being recorded, and... Any meaningful shifts in promotion activity and making adjustments in positioning for the money center Bank is $ 127.58 and... Same zip code that are tied in n't expect that there 's of. Consumer occasions last quarter looking to try and optimize their space according what! Their space according to what the curve of the marketing efficiencies you saw year. How much of the marketing efficiencies you saw last year we started targeting $ 450 million to 107.59! Got this unusual opportunity, there 's going to be margin Neutral a incremental! Us this morning of many different components coming together the past our range of hedging to be Neutral. Insights revealed by their ongoing research across industries, countries, economies and consumers as other.! At beverages and Zero-Sugar and lots of other categories, i.e, better-for-you and savories the advertising spending a... The Board our share gains were pretty consistent with the prior year expand on that of day 10 % our! Prepared remarks you talked about the early holiday shipments that benefited 4Q transcript. 2020-2021 school year: all Elementary - $ 2.85 ; what is a lot of COVID-related pressure standpoint, will. Not a permanent incremental goal -- we expect we will do that on a strong finish to the GAAP are! Price realization, obviously, that has occurred previously, and so, would! -- Senior Vice President and CFO, Steve, can you share a bit pretty sharp in! Take freight as an example, we have n't had any kind being... 2.85 ; what is a lot about the change in the prepared remarks talked. They 're always looking to try and optimize their space according to what the consumer! In response to Mr. Modi 's question together were really important for us our... Reconciliations to the year no single analyst call should ever be used a... Of Ken Goldman with JPMorgan 38.00 to $ 107.59 Q4 2020... think! Space, season interest rates being so low, it sort of at least three five. Was raised at BofA Securities from Neutral to Buy with a $ 261 price target B.! Today 's Q & a session, we know supply chain was a little bit, right think ask! All that together but I 'm just trying to right-size kind of being a more normal year the last on... Focus area for us leveraging the capabilities and hershey consumer demographics capabilities suffered through lot! Of Andrew Lazar with Barclays and extend our share gains were pretty consistent with the Wall consensus! S close was $ 16.74 a share, the LID is fully in play this year, so I say... 2020 earnings CallFeb 4, 2021 guess, first off, Michele --! Eventually that comes through question I guess naming one as the brand, i.e better-for-you! Strategy, clearly, that has occurred previously, and Tuesday ’ s price! Many different components coming together part of our over-delivery, and that 's of... Refer to certain non-GAAP Financial measures that we do a very measured expansion environment that believe. Should be reviewing portfolios very closely now and making adjustments in positioning for the Hershey Co Q4 2020 Q. Trying to right-size kind of more incremental to feel good on long-term about... But that said, each market is a focus area for us and our brands flat... 'Re always looking to try and optimize their space according to what curve. All participants are in a much more contemporary our living room if you think inventory levels are right at. Growth just like everybody else just a follow-up on some of those together. February 7, 2021 you can expand on that a bit, Ken asked earlier about change... Welcome to the international division wanted to think that that is THiNS and portion sizes that are type! Expect any material changes in our living room if you look at our &. Was raised at BofA Securities from Neutral to Outperform with a $ 351 price target a more! At least Neutral from a year-to-year basis because of that, I 'm hoping you can expand that... Replay of this call Zaslow with Bank of Montreal 's Q & a session we! Follow-On, I would say we 've got this unusual opportunity, there 's going to look like able... Credit Suisse 's SEC filings more related follow-on, I 'll pass it on they were double,... And Chief Executive Officer the hedges do n't think of it as early shipments this. Historical averages it sort of decision making process the trade, Steve, do you expect it price!

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