The Hershey Company (HSY): Business Model Canvas [Dec-2025 Updated]

You're looking at The Hershey Company (HSY) right now, and honestly, it's a fascinating pivot point for a legacy brand that just posted trailing-twelve-month revenue of $11.49 billion. The core challenge isn't just selling classic, nostalgic indulgence; it's successfully integrating high-growth areas like better-for-you snacks, which now account for a significant 22% of sales. We see them backing this strategic shift with planned 2025 CapEx between $425M to $450M while still projecting a modest overall net sales growth of about 3% for the year, even as the international segment showed strong Q3 growth at 12.1%. To understand exactly how this century-old confectioner is balancing its iconic core with modern snacking demands-and where the real operational risks are-dive into the full Business Model Canvas below.

The Hershey Company (HSY) - Canvas Business Model: Key Partnerships

You're looking at how The Hershey Company locks in its supply chain and market access through critical external relationships as of late 2025. These aren't just vendors; they are strategic anchors for growth and sustainability commitments.

Cocoa farming cooperatives in West Africa (sustainability focus)

The Hershey Company maintains deep, multi-year commitments with cocoa producers, central to its Cocoa For Good strategy, a $500 million investment running through 2030.

Key partnership metrics related to West African sourcing include:

• Five-year agreements with no fewer than nine cocoa-producing cooperatives in Côte d'Ivoire.
• Targeting 100% sourcing visibility over cocoa volume originating from Côte d'Ivoire and Ghana by the 2025 target year. As of 2024, visibility stood at 88%.
• Targeting 100% of farmers producing HSY's cocoa volume in Côte d'Ivoire and Ghana to be covered by Child Labor Monitoring and Remediation Systems (CLMRS) by 2025. The coverage reached 95% as of 2024.
• The Hershey Income Accelerator Program (HIAP), launched in Spring 2023, reached 1,850 cocoa farmers with initial cash transfers for adopting sustainable practices.

The goal is to have 100% direct-sourced cocoa in high-risk areas of its key African supply chains by 2025.

Major national and regional grocery/mass-market retailers

These partnerships are the primary conduit for The Hershey Company's products to reach the end consumer, directly impacting top-line performance.

Performance indicators from recent quarters show the strength of these retail channels:

The Hershey Company's total annual revenues are reported to be over $11.2 billion.

Co-manufacturers and co-packers (e.g., for Dot's Pretzels)

The acquisition of Pretzels Inc., a co-manufacturer for Dot's Pretzels, in 2021 for approximately $1.2 billion secured key production capabilities. This partnership structure continues to drive growth in the salty snacks portfolio.

The performance of the Dot's brand, which is supported by these manufacturing capabilities, shows strong velocity in retail channels:

• Dot's Homestyle Pretzels retail sales increased 13.0% in the 12-week period ending June 29, 2025.
• This growth resulted in a 208-basis point pretzel category share gain for the brand in that period.

The North America Salty Snacks segment income reached $66.5 million in Q2 2025, a 27.4% increase versus Q2 2024.

Certifying bodies like Rainforest Alliance and Fair Trade USA

The Hershey Company sources cocoa through recognized third-party verification systems, building on its achievement of 100% independently verified cocoa in 2020.

The company sources cocoa through:

• Fair Trade USA.
• Rainforest Alliance.

These certifications are part of the broader Cocoa For Good strategy, which aims to improve farmer incomes and environmental standards.

Licensed brand partners for co-branded products (e.g., JAKKS Pacific)

The Hershey Company actively partners to extend its iconic brands into new product categories through licensing agreements.

A recent example involves a partnership announced in December 2025:

• Agreement with JAKKS Pacific, Inc. to bring branding to the Charming line of small dolls and collectibles.
• The collection features dolls inspired by fan-favorite treats including Hershey's Kisses, Jolly Rancher, Reese's, Bubble Yum, Twizzlers, and Hershey's Syrup.
• The initial products, The Hershey's Kisses collectibles, are set to debut exclusively at CVS starting December 26, 2025.
• This specific partnership runs through December 31, 2026.

The Hershey Company portfolio, which includes these licensed brands, drives more than $11.2 billion in annual revenues.

The Hershey Company (HSY) - Canvas Business Model: Key Activities

You're looking at the core actions The Hershey Company takes to run its business as of late 2025. These are the things they must execute well to keep the whole model working, especially with commodity volatility high.

Global commodity procurement and hedging, especially cocoa.

Managing the raw material pipeline is critical, particularly for cocoa, which has seen unprecedented price swings. The Hershey Company is engaging with the U.S. government to seek an exemption from the current U.S. levy on cocoa. For 2025, cost pressure from cocoa is expected to build each quarter based on commodity hedges in place for the balance of the year. While the company has some coverage into 2025, executives warned that sustained high prices will drive inflation next year. To manage this, the company plans a 6-7% price increase, based on historic price elasticity around 1. They are also leveraging diverse sourcing options and flexibility in recipe taste profiles as levers to mitigate inflation. The Q1 2025 gross margin compression was expected to be greater in Q2 due to these commodity and tariff impacts.

Brand innovation and new product development (NPD).

The Hershey Company continues to invest heavily in keeping its portfolio fresh, blending classics with on-trend formats. The company projects allocating approximately 7% of its annual sales, which equates to more than $900 million, toward marketing, R&D, and similar growth initiatives. The innovation pipeline grew by over 40% in fiscal 2024 compared to the prior year. Key 2025 product launches include the Reese's OREO® Cup, uniting America's No. 1 candy and No. 1 cookie brands, and new Jolly Rancher Ropes Tropical Flavor, expanding a line that has seen 30.7% category growth since 2021. As of the October 2025 NACS Show, the company reported growing its sweets business by 23.2% in 2025.

Manufacturing optimization and supply chain automation.

The drive for efficiency is centered on the Advancing Agility & Automation Initiative (AAA). This program is on track to deliver an incremental $150 million in cost savings for 2025, up from the initial guidance of $125 million. Total projected full-year 2025 capital expenditures, including software investments, are set between $425 million to $450 million. A major component is Project Next Century, a $250 million to $300 million capital investment over three years, which includes a $200 million to $225 million plant expansion of the West Hershey facility. This modernization effort is expected to result in the reduction of approximately 500 to 600 jobs due to enhanced efficiency from technology and automation. The company is proud of its #1 in customer service ranking amongst its peers, supported by this large-scale production and distribution network that generates over $11.2 billion in annual revenues.

Strategic acquisition and integration (e.g., LesserEvil for $750M).

Expanding the better-for-you snacking platform is a clear activity, highlighted by recent deals. The acquisition of LesserEvil was widely reported at $750 million and closed in November 2025. LesserEvil generated revenue of about $165.0 million in 2024, implying a revenue multiple of roughly 4.5x on the reported deal value. This acquisition joins other salty snack brands like SkinnyPop and Dot's Homestyle Pretzels. The company also acquired FulFil North America in April 2025. For context on scale, previous major moves include the $1.6 billion acquisition of Amplify Snack Brands in 2017 and the $397 million deal for ONE Brands in 2019.

Mass-market advertising and seasonal promotional execution.

Marketing investment is calibrated to drive long-term growth, with the full-year 2025 advertising spend expected to increase by a mid-single digit percentage. Promotional execution is key, especially around holidays; preliminary results showed a strong Easter season where Hershey retail takeaway grew at least 16%, anticipating a seasonal share gain of over 120 basis points. The Selling and Marketing Expense for the latest twelve months ending September 28, 2025, totaled $600.1 million. Advertising spend showed quarterly fluctuation: it decreased 14.2% in Q1 2025 but increased 35.5% in Q2 2025. In-store promotions are highly effective, with standard bar placements achieving a 92% promotional lift in convenience stores.

The company's commitment to its core brands is evident, with Reese's commanding nearly 18% of the US chocolate market share, helping the company gain almost 500 basis points of market share since 2015.

The company's returns on invested capital have consistently outperformed the 7% weighted average cost of capital estimate by three to four times over the last five years, averaging 24.5%.

Finance: review Q3 2025 cash flow projections incorporating the LesserEvil closing costs by next Tuesday.

The Hershey Company (HSY) - Canvas Business Model: Key Resources

You're looking at the core assets that let The Hershey Company operate and compete. These aren't just things they own; they are the engine for their entire value creation process. Honestly, for a company this established, the resources are deeply entrenched and hard for a newcomer to replicate.

The foundation rests heavily on intangible assets, chief among them the brand equity. You see this reflected in their market position, which is a direct result of decades of consumer trust and product familiarity. The physical assets, like the manufacturing footprint, are also critical, especially as they invest heavily to modernize them.

Here's a breakdown of the key resources The Hershey Company is leaning on:

• Iconic brand equity (Reese's, Hershey's, Kit Kat US).
• Global manufacturing and distribution network.
• Strong financial base with TTM revenue of $11.49 billion.
• Proprietary chocolate and confectionery formulations.
• Planned 2025 CapEx of $425M to $450M for infrastructure.

Let's look closer at the scale of these resources, particularly the market power and the physical network.

The brand strength translates directly into market share dominance in the US. This is a massive resource, as consumers stick with what they know when they want that specific indulgence. The company's namesake brand, Reese's, is the top US chocolate brand, and the overall company commands a significant portion of the domestic chocolate space.

The physical network is designed for scale and reach. They aren't just selling domestically; their distribution capability is what allows them to maintain that market presence across different channels, from traditional retail to e-commerce. They are actively pouring capital into this system to ensure it stays modern and agile.

The investment plan for 2025 shows a commitment to maintaining this physical edge. This is about future-proofing production capacity and efficiency, which is necessary given commodity volatility.

• Planned 2025 Capital Expenditures (CapEx): $425 million to $450 million.
• Distribution Reach: Network extends to over 85 countries.
• Distribution Infrastructure: Supported by five large distribution centers.

Finally, the financial health supports all of this. A strong balance sheet allows The Hershey Company to absorb commodity shocks, like the cocoa price volatility seen recently, and still fund strategic investments and acquisitions. The revenue base is substantial, providing the necessary scale to negotiate favorable terms and absorb fixed costs.

The Trailing Twelve Months (TTM) revenue figure as of late 2025 reflects this scale:

• TTM Revenue (as of Q3 2025): $11.49 billion.
• FY 2024 Consolidated Net Sales: $11,202.3 million.

The proprietary formulations are the secret sauce, quite literally. These are the recipes and process technologies that define the taste and quality of their core products, which is why they keep production of core items in-house, treating the manufacturing facilities as centers of excellence for these proprietary technologies.

Finance: review the CapEx allocation breakdown for Q1 2025 by Friday.

The Hershey Company (HSY) - Canvas Business Model: Value Propositions

You're looking at what The Hershey Company actually delivers to its customers right now, late in 2025. It's not just about the classic chocolate bar anymore; it's a full snacking strategy built on a few key pillars.

Affordable, nostalgic, and high-quality indulgent treats.

The core value proposition still hinges on that familiar, high-quality indulgence. You see this play out in their pricing strategy, which has been a major driver of growth. For the third quarter ended September 28, 2025, The Hershey Company reported that its North America Confectionery segment achieved net sales growth of 5.6%, largely supported by approximately 7 points of net price realization. This price realization, even as volume declined approximately 1 point, shows they are successfully passing on costs while maintaining the premium perception of their treats. Furthermore, their U.S. candy, mint, and gum (CMG) retail takeaway grew 21.8% for the 12-week period ending June 29, 2025, indicating strong consumer pull for their core offerings, even at higher price points. They are also using value-focused tactics, like the Everyday Multiples (EDM) bundle deal strategy, to encourage multi-unit purchases.

Diversified portfolio spanning chocolate, salty, and protein snacks.

The shift to a broader snacking company is evident in the segment performance data. The Hershey Company is actively balancing its traditional confectionery business with high-growth salty and protein categories. For Q3 2025, consolidated net sales hit $3,181.4 million, up 6.5% year-over-year, showing the combined strength of the portfolio. The North America Salty Snacks unit was a standout performer, posting a 10% increase in net sales and an 11% volume increase in that same quarter. This diversification is key to weathering volatility in any single category, like the cocoa market.

Here's a quick look at how the main segments contributed to that Q3 2025 momentum:

Better-for-you (BFY) options (Lily's, LesserEvil) for health-conscious consumers.

The investment in health-conscious snacking is now a material part of the revenue base. As of 2025, revenue generated from better-for-you snacks rose 12% year-over-year. Honestly, this category now accounts for 22% of The Hershey Company's total sales. The planned acquisition of LesserEvil, a producer of organic, clean-label snacks, is set to further bolster this commitment in late 2025. This focus helps capture the market where 68% of U.S. consumers prioritize snacks with "clean labels."

Seasonal and limited-edition product excitement (e.g., Reese's OREO Cup).

Innovation drives excitement and trial, which is crucial for maintaining relevance. The Reese's OREO Cup is cited as a top growth driver, with a robust pipeline extending into 2026-27. While the Halloween selling period got off to a "somewhat soft" start due to weather and timing, strong execution on innovation helps offset these seasonal fluctuations. The company is using new product launches to keep consumers engaged across its confectionery lines.

Wide availability and convenience across all retail formats.

You can find The Hershey Company's products almost everywhere you shop. Their chocolate is available in 60 countries worldwide. Domestically, they are pushing hard in convenience channels; for instance, their salty brands saw a 9.5% Year-to-Date sales increase in C-stores (convenience stores). To support this massive footprint, the company operates three large distribution centers utilizing modern labor management systems. This infrastructure is designed to ensure that when a consumer wants a treat, it's right there on the shelf.

The Hershey Company (HSY) - Canvas Business Model: Customer Relationships

You're looking at how The Hershey Company (HSY) keeps its massive customer base engaged, from the biggest grocery chains to the youngest TikTok users. It's a complex mix of high-volume automation and targeted, personal outreach.

Automated, high-volume transactional relationship with retailers.

The foundation of The Hershey Company's volume relationship is its deep penetration across traditional retail. This means a high-volume, automated transactional flow with major partners. The company maintains a significant presence in supermarkets, convenience stores, mass merchandisers, drugstores, and wholesale clubs. This scale necessitates efficiency, which was a focus area, especially following the 2024 ERP system implementation, which aimed to create a more efficient and flexible global chain network. The company's ability to drive sales growth through net price realization, seen in Q3 2025 with an approximate 7 points of net price realization in the North America Confectionery segment, relies on these smooth, high-volume transactions.

Dedicated sales teams managing key account relationships.

For the largest retailers, the relationship moves beyond simple transactions. Andrew Archambault, as President of U.S. Confection, leads brand and commercial strategies, execution, and P&L oversight, which inherently involves managing the most critical customer relationships. This dedicated management structure is crucial for negotiating shelf space and promotional displays, especially as The Hershey Company pushes for changes like moving more snack-size confections into stand-up bags. The company's focus on omnichannel integration suggests these teams are aligning execution across both physical and digital retail touchpoints.

Direct-to-consumer (DTC) engagement via Hershey's Chocolate World.

While the bulk of revenue flows through third-party retailers, direct engagement is a key relationship lever. The Hershey Company utilizes e-commerce platforms and its own website for DTC sales. The physical locations, like Hershey's Chocolate World, serve as high-touch brand experiences, though specific foot traffic or DTC revenue figures for late 2025 aren't public. The overall digital sales strategy is designed to meet changing consumer needs, focusing on seamless availability.

Social media marketing targeting Gen Z (e.g., Sour Strips).

Targeting younger consumers requires a different relationship style, one built on digital conversation. The acquisition of the chewy candy brand Sour Strips in November 2024 specifically targets this demographic by leveraging the brand's strong social media presence. This brand, known for its social media savvy, posted an impressive nearly 50% surge in total sales over the previous fiscal year (as of May 2025). As of June 2025, The Hershey Company executives, like Paige Walker, were presenting on how they turn social data into smart business decisions, showing active management of these digital relationships.

Loyalty built on over a century of brand trust and nostalgia.

The deepest relationship asset is brand equity, built over more than 125 years. This heritage is actively used in marketing, such as the relaunch of travel retail exclusives with new graphics that celebrate the company's American heritage to drive consumer engagement. This trust allows The Hershey Company to maintain strong consumer loyalty, which is evident in the salty snacks category where research shows 70% of consumers are loyal to their favorite multipacks. This long-standing trust helps offset current headwinds; for instance, in Q3 2025, volume declined by approximately 1 point in North America Confectionery, which was partially offset by price elasticity, suggesting brand loyalty helps absorb price increases.

Here's a snapshot of the retail landscape supporting these relationships:

Finance: draft the Q4 2025 customer acquisition cost analysis by next Tuesday.

The Hershey Company (HSY) - Canvas Business Model: Channels

You're looking at how The Hershey Company (HSY) gets its products-the chocolate bars, the salty snacks, the mints-into consumers' hands as of late 2025. This is all about the physical and digital pathways they use to move product from their plants to your shopping cart.

The core of The Hershey Company (HSY)'s distribution relies heavily on established, high-volume retail partners. This includes the mass merchandisers and large grocery chains, which are the backbone of their North America Confectionery segment sales. For the 12-week period ending September 28, 2025, the U.S. candy, mint, and gum retail takeaway across the multi-outlet plus convenience channels (MULO+C) saw a year-over-year increase of 5.4%.

The channel mix is critical, and you see the difference in growth rates between categories. For instance, the convenience stores (C-stores) and gas stations, which are part of that MULO+C figure, saw strong performance, though the salty snacks category within those channels grew even faster. For the 12 weeks ending September 28, 2025, The Hershey Company (HSY)'s U.S. salty snack retail takeaway in the multi-outlet plus convenience channels rose by 14.2% year-over-year.

The Hershey Company (HSY) also maintains a direct-to-consumer presence through e-commerce platforms and a company-owned online store. While specific revenue percentages for this channel aren't broken out in the latest reports, the company uses these platforms for offering exclusive bundles and personalized gifting options, helping control the brand experience directly. This digital push complements the traditional routes.

The structure of their sales across major segments in Q3 2025 clearly shows the scale of these channel operations:

The International segment, which includes markets like Brazil and Mexico, is a key growth driver, with Q3 2025 net sales reaching $244.8 million, a 12.1% increase over the prior year. This international volume growth was approximately 6%, with Brazil showing double-digit growth.

The company's overall channel execution is tied to its financial guidance. For the full year 2025, The Hershey Company (HSY) raised its net sales outlook to approximately 3% growth. To support this scale, they forecast capital expenditures of $425 million for 2025. Furthermore, the company is actively managing costs across its supply chain, expecting its Agility & Automation Initiative to deliver $150 million in savings during 2025, which helps offset input cost pressures that affect pricing strategies across all channels.

The wholesale distributors and foodservice channels are integrated within these segment results, facilitating placement in non-retail locations. The overall consolidated net sales for Q3 2025 hit $3,181.4 million, reflecting the combined output of all these distribution methods.

You should keep an eye on the Q4 shipment timing, as volume increases in Q3 were partially due to a shift of shipments from the fourth quarter in Europe and Mexico, which is expected to reverse. That's a near-term channel risk to watch. Finance: draft 13-week cash view by Friday.

The Hershey Company (HSY) - Canvas Business Model: Customer Segments

You're looking at the core groups The Hershey Company targets to drive its sales across confectionery and its growing salty snacks portfolio. This isn't just about candy anymore; it's a multi-faceted approach to snacking.

The primary segment remains mass-market consumers seeking everyday and seasonal indulgence. This group drives the core business, as seen in the North America Confectionery segment, which reported net sales of $2,615.6 million in the third quarter of 2025, and $2,300.1 million in the first quarter of 2025.

A significant and growing focus is on health-conscious snackers. This segment now accounts for 22% of total revenue for The Hershey Company as of 2025, a notable increase from 15% in 2023. Revenue from better-for-you snacks saw a rise of 12% year-over-year in 2025. This aligns with the broader consumer trend, where 68% of U.S. consumers prioritize snacks with clean labels.

The Hershey Company also heavily relies on its wholesale and retail partners (B2B). These partners are crucial for distribution across various channels. For instance, in convenience stores (C-stores), confectionery promotions using the Everyday Multiples (EDM) strategy deliver a 56% average unit lift, and standard bars achieve a 92% promotional lift. The company maintains a 47% market share in snack size confections, a key area for retail shelf space.

Targeting younger consumers and Gen Z is being executed through strategic innovation and acquisitions. The acquisition of Sour Strips in late 2024 is specifically noted for boosting appeal among Gen Z shoppers. Furthermore, a limited-edition "Dubai chocolate" bar launch, priced at $8.99 with only 10,000 bars produced via GoPuff, directly targets this demographic, as roughly 85% of GoPuff users fall into the Gen Z category. For branded desserts overall, 63% of Gen Z consumers will choose a restaurant specifically for one they love, and 70% of Gen Zers are likely to return to a restaurant where they enjoyed a Hershey-branded dessert.

Here is a look at the market context for these segments:

The willingness to pay a premium by these younger consumers is quantifiable:

• One-third of Gen Z and Millennial consumers will pay between $0.50 and $1.50 more for a Hershey-branded dessert.
• The North America Salty Snacks segment margin reached 21.1% in the second quarter of 2025.
• The North America Salty Snacks segment margin was 15.1% in the first quarter of 2025.

The Hershey Company (HSY) - Canvas Business Model: Cost Structure

The Cost Structure for The Hershey Company is heavily weighted toward input costs and significant brand investment. You see this pressure acutely in 2025, especially with commodity volatility.

High variable costs for raw materials (cocoa, sugar, dairy).

The cost of goods sold remains a primary driver of expense, with cocoa being the most volatile input. To manage this, The Hershey Company hedges over 40% of its annual cocoa requirements to try and mitigate some of that price swing. For the latest twelve months ending September 2025, Cost of Sales was reported at $2.14B.

Significant manufacturing and logistics expenses.

Manufacturing and supply chain efficiency are key levers to offset input cost inflation. The company is actively pursuing productivity improvements, targeting approximately $150 million in savings from its Advancing Agility & Automation Initiative for the full year 2025, an increase from the previously stated $125 million goal. The longer-term goal is to achieve $300 million in productivity savings by 2026.

You can see a snapshot of the key cost components and projections here:

Sales, advertising, and promotional spending.

Brand building is a substantial, ongoing cost. For the second quarter of 2025, advertising and related consumer marketing expenses jumped 35.5% compared to the same period last year. Overall Selling, marketing and administrative expenses increased 11.5% in Q2 2025 over Q2 2024, though expenses excluding advertising only rose 2.2%.

Capital expenditures for automation and capacity expansion.

The Hershey Company is investing in its future operational base. The projection for capital expenditures, including capitalized software, for the full year 2025 is set between $425 million and $450 million. This spending is intended to bring capital spending as a percentage of sales back to historical levels. For context, actual CapEx in 2024 was $605.9 million.

Debt servicing costs from recent note offerings.

Financing costs are clearly rising due to the general interest rate environment. The full-year 2025 interest expense is projected to be approximately $200 million, reflecting higher leverage and interest rates on note issuances. This compares to the actual interest expense of $174.3 million recorded for the full year 2024. Long-term debt stood at $3.49 billion at the end of 2024.

You need to watch that interest expense projection closely; it's a fixed commitment.

The Hershey Company (HSY) - Canvas Business Model: Revenue Streams

You're looking at how The Hershey Company actually brings in the money, which, as of late 2025, is still heavily weighted toward its core. The North America Confectionery sales remain the primary engine for revenue generation, which you can see clearly when you look at the third-quarter numbers.

Here's a quick look at the segment net sales performance for the third quarter ended September 28, 2025, compared to the prior year period:

The North America Salty Snacks stream, which includes brands like SkinnyPop and Dot's, delivered robust growth in that same quarter. That segment posted net sales of $321.0 million, marking a 10.0% increase versus the third quarter of 2024. Honestly, that growth rate outpaced the core confectionery business for the quarter.

The International segment, while smaller in absolute terms, showed the strongest percentage growth rate in Q3 2025. Net sales for this stream increased by 12.1% year-over-year, reaching $244.8 million. Still, that segment reported a loss of $13.6 million in Q3 2025, showing profitability challenges despite the top-line acceleration.

When you look at the full-year expectations based on that Q3 momentum, management raised the guidance. The overall revenue picture for The Hershey Company for the full year 2025 is now projected at approximately 3% net sales growth, up from the prior guidance of at least 2%.

The complete set of revenue streams contributing to The Hershey Company's top line includes:

• North America Confectionery sales (primary stream).
• North America Salty Snacks sales (e.g., SkinnyPop, Dot's).
• International segment sales (Q3 2025 growth of 12.1%).
• Full-year 2025 net sales growth projected at approximately 3%.
• Licensing and royalty income from brand usage.