Hershey Co. is planning 10 more production lines to capitalize on recent success, executives said on a recent earnings call.
Hershey saw net sales grow 16.1% for the first fiscal quarter. Of that total, 11.5 percentage points were from Hershey increasing prices for its products; the rest were due to increased sales volumes and acquisitions.
“Our manufacturing team did a great job leveraging investments in capacity and labor to increase production mid-single-digits, versus prior year, and, in fact, delivered our biggest production quarter yet,” CFO Steve Voskuil said in remarks to investors.
Hershey grew volume share in chocolate by 7% over the last two years while competitors declined 1%, CEO Michele Buck said in that earnings call. That was something of a mixed blessing, however, because while Hershey focused on fulfilling those orders, its competitors “have been able to maintain advertising and promotional levels, and better service demand, to regain share to start the year.”
To remedy that situation, Hershey plans to install 10 new production lines to generate “incremental capacity” in 2023 and 2024, Buck said. In addition, it will start up three new distribution and fulfillment centers this year.
More generally, Hershey has instituted “a project to more formally and efficiently institute some of the approaches we implemented during the COVID-19 crisis into our regular planning process,” she said.
