The Hershey Company: Beyond Chocolate
May 15, 2018
See the new issue of Briefings magazine, available at newsstands and online.
We’re listening to Michele Buck recount brand stories, and her voice grows more enthused. There was the family that celebrated their grandfather’s 100th birthday with a cake made entirely out of Hershey’s Milk Chocolate Bars (the grandfather’s favorite, of course). Then there was the man who lined up seven Hershey’s Kisses every night and ate them one by one. When he died, his wife lined up seven of those foil-wrapped confections in his casket. “We get
stories like this every day,” she tells us. “By the dozens.”
But since taking over one of the most iconic companies in the world in March 2017, Buck has come to realize that even companies with such a devoted following need to branch out in today’s hyper-demanding consumer world. And so begins The Hershey Company’s move to capture more of what Buck likes to call “snacking occasions,” which will require both innovation and new strategies that complement its core sweets business.
Buck, the first female CEO of the 124-year-old company, is also among 24 female CEOs in the Fortune 500, a position she says wasn’t her goal early in her career. Like many other female CEOs interviewed as part of Korn Ferry’s study of women leaders, sponsored by the Rockefeller Foundation, Buck said her focus was more on “a strong desire to work with others, to see enterprise results ... and to see the team succeed.”
But we want to know more. So Buck sat down recently with Briefings to discuss her leadership and what it’s like to guide an iconic company that’s in the midst of unprecedented consumer change. (Questions and answers have been edited.)
As Hershey’s first female CEO, how do you view the importance of having diverse perspectives within the company and its leadership ranks?
● I hold tremendous regard for the many female Hershey trailblazers who came before me. As we did some work on diversity, I was delighted to see that we had our first female board director in 1978. I can’t imagine that there were too many female directors then.
I’m really proud that we have women well represented across our employee base. And you can certainly see the progress that we’ve made, especially on our executive committee and also on our board, particularly in the past couple years. [Currently, Hershey’s 13-member board includes five women.]
What are some of Hershey’s milestones in diversity achievement?
● We’ve been recognized consistently for our work in diversity. We joined the Paradigm for Parity, a coalition that helps companies close the gender gap, and for the fourth consecutive year, were recognized with a 100 percent rating from the Human Rights Campaign Foundation. One of our board members, former Pennsylvania Governor Tom Ridge, has been very active with individuals with disabilities, and so has the company. We have earned back-to-back National Organization on Disability seals for disability inclusion. And, in 2016, we supported three White House initiatives: the White House Equal Pay Pledge, the First Job Compact Pledge and the Fair Chance Pledge.
Upon looking back at your career, you’ve mentioned the importance of taking on different assignments. Can you describe this for us?
● I grew up with marketing as my functional backbone. About 10 years into my career, I had an opportunity to take on my first general-management assignment. The interesting thing was it was also a turnaround assignment. The plant itself was failing, and the company was planning to shut it down. I sought out coaching, leaned into my leadership skills and learned to manage different technical functions. This was a very different role for me, and we were able to turn the facility around. The company decided to keep the plant open, and when I left the job, the Teamsters Union plant employees gave me a handmade plaque that read, “Our Loss Is Their Gain.” It is the most meaningful reward I’ve ever gotten.
A good example of pulling together a team for a turnaround.
● The second example was at a fairly junior level. I was given the responsibility to lead the divestiture of a pretty sizeable business with total autonomy to do it on my own. And I had never done this before—never worked on a management presentation or with … pretty hard-core investment bankers who weren’t exactly easy to deal with, and then presented to a number of significant Fortune 500 CEOs, all by myself. My boss told me, “This is your job, here are the parameters. You’re going to earn a bonus based on the sales price you get, so this is your scorecard.” It was a great development exercise and a confidence booster. I maxed out on the price I got for the business.
As a female CEO, can you describe how diversity influences your leadership thinking?
● One of my fundamental leadership philosophies is a deep belief in diverse perspectives. As a leader, I love to listen, and I value the courage to speak out—for people to bring forth their different ideas. One of the best ways to get those ideas is to [bring together] people with diverse backgrounds and experiences. I really think about [diversity] very broadly as diversity of thought—and some of that comes from what we might consider the more traditional ways that diversity is viewed. But some of it comes from diverse experience overall. Diversity is particularly impactful in driving innovation and new ways of doing things.
Speaking of innovation, can you talk about Hershey’s recent acquisition of Amplify Snack Brands, which is probably best known for Skinny Pop?
● When I took over as CEO, I set the goal for Hershey to be an innovative snacking powerhouse. We are actually the No. 2 snacking company by virtue of being No. 1 within confections. We love our confections business. We have a strong leadership share position. We’ve had strong single-digit growth on our core brands year after year over the past several years.
Building off that tremendous strength, with our presence in confections, a lot of the capabilities we have are very transferable across snacking. Our taste science in R&D. Our ubiquitous distribution because snacks are found everywhere. Our manufacturing capabilities. Our consumer insights, because we look broadly to understand consumer snacking. So it really starts with winning in confection, and then how we capture more consumer snacking occasions.
How do you leverage Hershey’s strength in confections to other snacks?
● We really study what consumers are looking for: They’re snacking more overall. Indulgent snacking is growing. Better-for-you snacking is growing. Sweet snacking is growing. Salty and savory snacking is growing. So how do we capture as many of those opportunities as possible, leveraging the capabilities we have? And that is what Amplify will let us do. Amplify also has the benefit of being a scale brand on top of that—Skinny Pop is now our sixth largest brand, which is pretty incredible. Strong margins, industry-leading velocity. We have a lot of confidence that it can be a key pillar of growth for us.
How is Hershey expanding globally?
● Globally, we start first with expanding some of our core business into international markets. Greater than 50 percent of our sales in our international markets leverage the Hershey’s brand. We stay consistent with the brand, but we do alter our product formulas and some of our packaging according to what’s important in the local environment. Packaging is obviously much more important in Asia, so we have some unique packaging that is a little more special and that’s appealing to consumers in that market. But we really do start with Hershey’s as the core, and then we look at where there are local opportunities that make sense to build around that.
How are you reaching consumers today using traditional and digital media?
● Consumers are evolving, as they have over time. It’s our job to keep pace and to meet consumers’ needs—how they are consuming media, how they are shopping—and to make sure that we’re set up to deliver. While we continue to see growth in bricks-and-mortar consumption, we also see growth in e-commerce. We have a focused cross-functional team that is building a digital commerce business for us.
In marketing and media, we absolutely have evolved from being television-focused years ago to today really having an approach to reach the consumers where they are. That includes social media and PR that generates a lot of earned impressions. In fact, we’ve gotten quite good at doing that in advance of a lot of our innovation launches, where consumers know it’s coming before it’s even on the shelf.
So, we have to ask, what are your favorite snacks?
● I really like Almond Joy and Take Five. Take Five is a newer brand that we developed in the early 2000s. And it’s just this great combination of pretzel, caramel and chocolate. When I’m hungry, it just hits the spot. And I actually like Almond Joy—it’s from my childhood.
I remember eating it as a kid.
(click image to enlarge)