Hershey boss: Air Delight is a terrific product, but we’re still working out how to market it…
Speaking on Hershey's Q3 earnings call with analysts last week, chief executive John Bilbrey was asked how well Air Delight chocolate bars and kisses were performing after an analyst observed that Air Delight “doesn't seem to be lapping as well” as other new launches such as Rolo Minis and Simple Pleasures.
Bilbrey said Rolo Minis were “tracking ahead of expectations” with “repeat [purchases] about 25% above our target”, while the Simple Pleasures launch “is in line with our assumptions”.
But he added: “With regard to Air Delight, we're still trying to work through our communication messages.
“We think the product's a terrific product. It's a form that does well in a number of different countries around the world. We do well with it in Brazil. And so, we're really working through what we think the messaging is.
“So I wouldn't say that it's something we're not committed to because we're very committed to getting it figured out, but I think it's also different enough and new enough that it's going to continue to take some work for us.”
Rolo Minis are definitely a home run. I wish I could have one of those every single time
While Hershey has had a lot to say about Rolo Minis, senior executives have not said very much about the performance of Air Delight since it launched last summer.
Speaking on the firm’s Q3, 2011 earnings call last year, Bilbrey said early trial numbers were “outpacing our initial modeling”.
But he cautioned: “We're very excited about this launch, [but] it's important to remember that Air Delight is a new and unique form and texture for U.S. consumers and will require brand building efforts.”
Some months later on the Q1, 2012 earnings call, however, he hinted it was taking a while for consumers to embrace the product, adding: “Minis is definitely a home run. I wish I could have one of those every single time, and certainly, that's probably not always going to be the case.
“But… anytime you have something new, so whether it be Air Delight, whether it be… Simple Pleasures, you're really building a platform that the consumer has to learn what it is.
“So trial is important and… repeat is fundamental. So it's a little bit longer of a story on those brands when you launch those first than something that's a big driver around a core brand.”
Churn is not really good for the category
He added: “We want to make sure that we stick with these things, that we advertise in the second year and really look at them as long-term as possible.
“Churn is not really good for the category. And if we can have a stickier innovation, it's really better for everybody.”
The best known aerated milk chocolate bars are Nestlé ‘s Aero bars and Cadbury’s (now Mondelez’s) Wispa bars, which both have loyal followings in the UK market.
Wispa, which was launched in the early 1980s, was relaunched in 2003 as Dairy Milk Bubbly, but re-introduced as Wispa in 2007 following a social media campaign calling for it to be brought back.
Aero, which has larger bubbles, was first developed in the UK in the 1930s by Rowntree's, which was acquired by Nestlé in 1988.
Click here for a full breakdown of Hershey’s Q3 results.