Hershey banks on better-for-you confectionery with sugar-reduction strategy

18 Feb 2021 --- The Hershey Company is conducting a multipronged strategy to lead the better-for-you chocolate category – a market worth an estimated US$1.3 billion or 6 percent of category retail sales.

The chocolate giant will expand its future portfolio to deliver reduced or no-sugar options while continuing to build its classic array of portion-controlled products. Moreover, Hershey is investing in research into “rare sugars,” which are processed differently than regular sugar in the body.

“Results of our research have shown that just over half of the US market over the age of 18 is seeking better-for-you options. These range from those highly committed to nutrition and health to those who are looking to feel good about their choices,” Amy Preston, PhD and senior manager of R&D regulatory and nutrition and agile innovation at Hershey, tells FoodIngredientsFirst.

The better-for-you subsection of the confectionery market is growing faster than the category itself, and Hershey expects it to comprise a greater portion of category sales in the future, Preston observes. 

“Accordingly, the new products being developed will serve a range of consumer needs including sugar reduction, sugar elimination, and offering alternative sources of sugar.” 

Hershey’s first offerings in its better-for-you NPD include organic and zero-sugar products, set to land on US shelves next month.

Hershey will continue to offer its core brands in portion-controlled pack types.Controlling portion size 
Hershey emphasizes both the benefits of portion-controlled snacks and reduced-sugar formulations. 

“Portion-controlled offerings can be packaged to provide consumers with a way to limit their calorie, fat, and sugar intake by eating fewer pieces,” affirms Preston.  

The company cites previous successes in smaller snack sizes, such as Reese’s Peanut Butter cups in miniature size, thinner versions (Reese’s THiNs), and one with zero sugar, as well as its classic Hershey’s Kisses Milk Chocolates. 

Reducing sugar 
Furthermore, the company aims to reduce the sugar in products from a range of 25 percent reduction up to its existing Zero Sugar portfolio. 

“Our Hershey’s Zero Sugar Chocolate is 30 calories less than an equal amount of Hershey’s Milk Chocolate and provides 0 g of sugar per serving,” Preston says. 

Future reduced-sugar offerings will focus on keeping calories about the same or less than that of the company’s core confectionery offerings.  

Sugar reduction is a shared interest that all better-for-you snackers have in common, according to Hershey.“No added sugars” with rare sugars
In addition to its NPD pipeline, Hershey is expanding its better-for-you footprint by investing in sugar alternative R&D. 

The company is joining forces with sweetener specialist ASR Group to co-lead an equity investment in Bonumose, a start-up company with “breakthrough” innovations in plant-based food ingredients and rare and natural sugars. 

Rare sugars are different from traditional sugars because the body metabolizes, or digests, them differently than traditional sugars. They occur naturally in very small quantities in foods such as figs, in the case of allulose. 

“Hershey is excited to join ASR in an investment that will accelerate the commercial production and distribution of rare sugars, such as allulose and tagatose,” says Preston.  

As a result, the US Food and Drug Administration (FDA) has issued guidance that allows for the exclusion of allulose from both the total and added sugar amounts on the Nutrition Facts Label. A final decision on the labeling of tagatose is still pending with the FDA, she details. 

Other aspects of Hershey’s long-term strategy include teaming up with better-for-you brand partners to co-develop and launch new offerings. The company will also evaluate a pipeline of acquisition opportunities to deliver incremental occasions and access for consumers that Hershey’s core brands don’t reach today.

Chocolate supplements on the rise
Healthy and functional chocolate has recently emerged as a growing trend to deliver supplements in a more exciting and accessible way. 

Innova Market Insights has observed that global supplement launches with a chocolate flavor have grown by 14 percent (CAGR 2015-2019). 

Vitamins & Minerals was the top subcategory for chocolate-flavored supplements, with Probiotics and Botanical or Herbal Supplements also being common. However, Hair, Skin & Nails was the fastest growing, with an average annual growth of 78 percent (Global, CAGR 2015-2019).

In recent launches, the Functional Chocolate Company unveiled its first range of chocolates targeting women’s health, specifically PMS, menopause, low-libidos, and stress and anxiety this month. 

Last August, Mybite Vitamins launched its multivitamins with an indulgent chocolatey coating, caramel, nuts and a fluffy center.

By Missy Green