Hershey buys candy brand Sour Strips for undisclosed amount

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Dive Brief:

• Hershey purchased Sour Strips, a sour candy brand founded in 2019 by social media personality Maxx Chewning, the company said in a Friday press release. The purchase price was not disclosed.
• Sour Strips expands Hersey’s sweets portfolio and increases the company’s ability to reach new consumers across more snacking occasions, the Reese’s and Dot’s Homestyle Pretzels manufacturer said. The Sour Strips brand, which uses the slogan “sour candy that doesn’t suck,” is sold by retailers including Walmart, Amazon and Target. 
• Sour candy has proven to be especially popular with young consumers. The size of the market size is estimated to reach $2.7 billion by 2030, growing at a compound annual growth rate of 7.3%, according to a report from IndustryARC.

Dive Insight:

While much of Hershey’s acquisitions in recent years have bolstered its salty snacks division, the sweets side of its business remains top-of-mind. Mike Del Pozzo, president of U.S. confections at Hershey, said the company is “relentlessly” accelerating its growth in sweets, with Sour Strips playing a key role in this initiative.

Hershey noted that Sour Strips has a “powerful” presence on social media. The upstart sour candy brand said on its website that it has amassed more than 400,000 followers across all platforms.

Hershey said Chewning will continue to lead marketing and innovation efforts for the brand. Given his role in innovation and his connection with young consumers through his social media presence, keeping Chewning involved is hugely important for the confections giant as it integrates and grows Sour Strips.

The majority of Hershey’s presence in sweets is in sugar-laden treats, such as Kisses, Milk Duds and its namesake chocolate bars. But as the sour trend has taken hold, Hershey has added more offerings to meet consumer demand. In September, Hershey launched a sour version of its Shaq-A-Licious XL Gummies, part of its partnership with basketball star Shaquille O’Neal.

Such offerings also enable Hershey to diversify beyond chocolate, which has been hit hard by changing consumer preferences and a prolonged period of elevated cocoa prices. 

Sour Strips is a smaller brand compared to many of the other popular products in Hershey’s portfolio. Still, a hallmark of prior acquisitions by Hershey is tapping into its innovation, marketing and larger distribution network to increase the product’s reach — a process the company used following its purchases of Dot’s and SkinnyPop. Hershey will probably execute the same strategy with Sour Strips. 

This week, Hershey cut its net sales growth forecast for the year after a series of price hikes curtailed demand for its sweet and salty products.

“We believe in the resiliency of our snacking categories and the strength of our brands,” said Michele Buck, Hershey’s CEO. “Our priorities are to drive top-line and market share growth by winning in-store with key customers, expanding our chocolate portfolio, accelerating sweets, and maximizing our seasonal strength.”