Those who have observed business and the Hershey’s Company in particular have seen this movie before. That is the tale of Hershey’s trying to become more than just a chocolate company.
For reference, the company is already second in the snack industry behind just PepsiCo says CNBC. This is not the first time that Hershey’s has attempted to move its image beyond just that of the nation’s leading chocolate company. Unfortunately for them, they have never really been able to get much going beyond their reputation for chocolate.
In the past the company has tried everything from cookies to running their own restaurant chain. The result every time has been a failure in the traditional sense that has left them scrabbling back to their roots in chocolate.
The main problem for Hershey right now is that they cannot simply fail yet again and then just move on back into chocolate so easily. They have done so many times before, but the rate of chocolate consumption grows at just 0.7% annually at this point. Also, there are many more competitors in the chocolate industry than there were in the past. Therefore, it is not entirely easy for the company to just push itself back into its roots in chocolate.
For a long time Hershey’s and others in the industry could safely live in the comfort of knowing that people always would want to have their chocolate. However, even that is starting to fad away now as fewer people are reaching for this treat than in the past. These days, it is not uncommon for people to look for healthier snacks. All of the sudden, it doesn’t particularly matter that Hershey’s has long been the leader in chocolate. They have to face the very real issue of combating declining sales just like many other parts of the food industry.
Hershey’s is definitely going to face a crossroads here. They have to try to diversify in order to remain competitive. However, they have not had much success with it in the past. If they fail again this time it could be worse than their previous attempts. At the end of the day, we all have to wait and see how they fare coming out of this. It is just not yet clear which direction Hershey’s is going to take things. Perhaps they will prove themselves to be more successful this time. History is not on their side though.