Hershey Expands Sweets Portfolio with Acquisition of Sour Strips

Rhea-AI Summary

The Hershey Company (NYSE: HSY) has acquired Sour Strips, a sour candy brand founded in 2019 by social media personality Maxx Chewning. The acquisition aims to enhance Hershey's presence in the sour candy category and expand its reach to new consumers. Sour Strips, known for its "sour candy that doesn't suck" tagline and strong social media presence, will continue to have Chewning leading its marketing and innovation efforts. The brand focuses on combining shockingly sour flavors with innovative branding to elevate the candy experience.

Positive

• Strategic expansion into the sour candy category
• Acquisition of a fast-growing brand with established social media presence
• Retention of founder for marketing and innovation continuity

Negative

• None.

Insights

Market Research Analyst

The acquisition of Sour Strips represents a strategic move into the growing sour candy segment, particularly targeting younger demographics through social media channels. This complements Hershey's traditional chocolate-focused portfolio and addresses changing consumer preferences. Key strategic benefits include:

• Access to Gen Z and millennial consumers through Sour Strips' strong social media presence
• Diversification beyond chocolate into the expanding sour candy market
• Retention of founder Maxx Chewning, maintaining brand authenticity and social media influence

While the financial terms weren't disclosed, this acquisition follows Hershey's pattern of purchasing emerging brands with strong growth potential. The deal should contribute to incremental revenue growth, though likely not material to Hershey's overall financial performance in the short term given the relative size of Sour Strips.

Financial Analyst

This bolt-on acquisition aligns with Hershey's strategy of expanding its non-chocolate portfolio to drive growth and reduce dependency on cocoa prices. The sour candy segment has shown robust growth rates, outpacing traditional chocolate categories. While the deal size isn't disclosed, Sour Strips' digital-first approach and established e-commerce presence should provide immediate distribution synergies and operational efficiencies. The retention of the founder for marketing and innovation suggests a structured earnout agreement, typical for founder-led acquisitions. This deal structure often helps maintain brand momentum while managing acquisition costs.

HERSHEY, Pa., Nov. 8, 2024 /PRNewswire/ -- The Hershey Company (NYSE: HSY) today announced it has acquired Sour Strips, a fast-growing sour candy brand with a powerful social media presence. Sour Strips' "sour candy that doesn't suck" enhances Hershey's presence in the category and expands its reach to new consumers for more snacking occasions.

Founded in 2019 by social media personality Maxx Chewning, Sour Strips set out to invigorate the sour candy category with a distinctive product that combines shockingly sour flavors with innovative branding to elevate the candy experience. Chewning will continue to lead marketing and innovation efforts for the brand.

"The acquisition of Sour Strips expands Hershey's offerings within our growing sweets portfolio with a product that is beloved by consumers," said Mike Del Pozzo, President, U.S. Confection, The Hershey Company. "We're energized to welcome Maxx and the Sour Strips team to Hershey as we relentlessly accelerate our growth in sweets."

"Our partnership with The Hershey Company represents a significant step in our mission to innovate and set new standards within the Confection category," said Maxx Chewning, Founder of Sour Strips. "Hershey's exceptional track record making iconic brands worldwide aligns perfectly with our vision for Sour Strips. Together with Hershey, our team is excited to continue delivering extraordinary experiences to candy enthusiasts around the globe."  

About The Hershey Company 

The Hershey Company (NYSE: HSY) is an industry-leading snacks company known for making more moments of goodness through its iconic brands, remarkable people and enduring commitment to doing the right thing for its people, planet, and communities. Hershey has more than 20,000 employees in the U.S. and worldwide who work daily to deliver delicious, high-quality products. The company has more than 90 brand names in approximately 80 countries that drive more than $11.2 billion in annual revenues, including Hershey's, Reese's, Kisses, Kit Kat®, Jolly Rancher, Twizzlers and Ice Breakers, and salty snacks including SkinnyPop, Pirate's Booty and Dot's Homestyle Pretzels.

For over 130 years, Hershey has been committed to operating fairly, ethically and sustainably. The candy and snack maker's founder, Milton Hershey, created Milton Hershey School in 1909, and since then, the company has focused on helping children succeed through equitable access to education.

To learn more visit www.thehersheycompany.com.

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SOURCE The Hershey Company

FAQ

When did Hershey (HSY) acquire Sour Strips?

Hershey acquired Sour Strips on November 8, 2024.

Who founded Sour Strips before Hershey's acquisition?

Sour Strips was founded by social media personality Maxx Chewning in 2019.

What role will Maxx Chewning have at Sour Strips after Hershey's acquisition?

Maxx Chewning will continue to lead marketing and innovation efforts for the Sour Strips brand under Hershey's ownership.

Why did Hershey (HSY) acquire Sour Strips?

Hershey acquired Sour Strips to expand its presence in the sour candy category and reach new consumers for more snacking occasions.