Evaluating The Confectionary Industry Within The United States

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1. EXECUTIVE SUMMARY The following report was created with the purpose of examining the confectionary industry within the United States (US) in order to identify a new product to be introduced to The Hershey Company’s (Hershey’s) existing line of products. This report is focused around a SWOT analysis and based on its findings, recommendations were made to finalise the new product and to determine how it will fit into the market. The results obtained from the analysis resulted in the creation of Hershey’s Gold, a Fairtrade, organic, ethically sourced and produced muesli bar containing nuts and fruit pieces topped with dark chocolate and shredded coconut. 2. INTRODUCTION & BACKGROUND INFORMATION This report explores the history of…show more content…
It was founded in 1894 by Milton S Hershey as a subsidiary to the Lancaster Caramel Company. Hershey’s products are sold in more than sixty countries across the world within the confectionary market. Its main competitor is Mars, Inc. (Mars) (MarketLine 2013) 3. MARKET DESCRIPTION The confectionary market consists of retail sales of chocolate, gum, cereal bars and sugar confectionary. The chocolate segment of the market was the most profitable in 2014, with a total revenue of $18,835.3m USD, which equates to 50.4% of the markets total value while the sugar confectionary segment achieved a total revenue of $11,193.8m USD, equalling 29.9% of the markets aggregate value. (MarketLine 2015, p.7) The US confectionary market consists of four key competitors. Mars is the leading competitor generating a 30.4% share of the markets value. Hershey’s holds the second largest share in the confectionary market with a share of 27.9%. Other key competitors include Mondelez International Inc. and Nestle S.A. (MarketLine, 2015, p.12) Small independent retailers, multinational supermarkets and department stores hold moderate buying power in the US confectionary market. Supermarkets and hypermarkets, however, are the major buyers, which account for 37.7% of the total sales revenue. These buyers hold a lot of buying power since they have control over extensive distribution systems, command strong brands and negotiate bargains with other players in the market. When choosing
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