Company loves misery
Hershey invested in ads near COVID-19 outbreaks to boost s'more sales
The increase in chocolate sales for many areas hit hardest by the pandemic.
Would it surprise you to learn that some of America's largest companies have been capitalizing on you and your loved ones' misery over the past year? Of course not. And yet, somehow, the knowledge that candy manufacturers are doing it stings that much more, as evidenced on CNBC's Closing Bell yesterday, when Hershey CEO Michele Buck explained the company's strategy for not simply weathering the worst of COVID-19's societal effects, but for capitalizing on the situation — a business plan as cynical as it is unsurprising.
"This past year, we noticed that wherever COVID case counts were elevated, we were seeing increased sales of s’mores ingredients," Buck explained to Closing Bell reporter, Sara Eisen. "...Then we were able to use the case count trajectory as a foreshadow of where we should focus some of those efforts and build displays and put media in those markets." In essence: Hershey pinpoints misery, then increases advertising unhealthy dietary coping mechanisms accordingly. A tale as old as time.
The sweet smell of success — According to Business Insider, Hershey increased its marketing and ad expenses by 4.9% between October and December of last year, specifically in places anticipated to soon receive spikes in COVID-19 infection rates. That, coupled with the company's creepy (albeit ingenious) method of measuring s'more ingredient sales statistics, helped see chocolate sales increase as much as 40-50% in areas more affected by the pandemic compared to regions with fewer cases.
It's an investment that has since paid off generously: The candy manufacturer's Q4 sales jumped 5.7%, a $2.19 billion increase, from that same time the year prior. Elsewhere, Hershey's overall profit grew a staggering 41.5% to $405.1 million.
Not all businesses are struggling — Candy isn't the only industry seeing gains during the ongoing COVID-19 crisis. Floral arrangement companies, for example, have also experienced massive windfalls since early last year, alongside video game companies like Nintendo which has been raking in cash, especially when it comes to sales of its Switch console. Guitar makers are breathing pretty easy, too, although we can't say the same for whoever is living with those customers who decided to "take up" an instrument for the first time this past year... especially when they can't really go out to get away from the "jam sessions."
Sure, one can argue that this is simply how good, ol' fashioned capitalism works — businesses either adapt to the markets or perish. But did the icy grasp of greed really need to taint our beloved s'mores in the process?