Hershey brings iconic flavors to hot cocoa mixes, readies further licensing innovation

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Source: Hershey

The Hershey Company once again is expanding beyond its iconic cocoa product with its Candy Shop collection — a portfolio of hot chocolate kits based on its iconic flavors — as the company leverages licensing agreements to create new products to stay on top of consumer trends.

Available starting in September, the Candy Shop Cocoa collection features hot cocoa versions of Hershey's chocolate and Cookies ‘n' Creme flavors, Reese's Peanut Butter Cup and Yorkshire Peppermint Patty. Hershey partnered with dry blending and packaging company Kent Precision Foods Group to develop the products, which has expertise in hot chocolate and cocoa mixes.

“Our well-established cocoa business is primarily used in baking occasions, but it also makes a great cup of homemade hot chocolate. We have also been in hot chocolate mixes as a direct business and through licensing arrangements in the past. We are really excited to have hot chocolate mixes back into the market, and we think that with this partnership with Kent Precision, we found the right partner that can help us reenter the [mixes] category in a way that pays homage to our rich history of hot chocolate and the familiar taste of Hershey’s,” said Ernie Savo, president of The Hershey Licensing Company told FoodNavigator-USA.

Is Hershey’s next license deal going to be in better-for-you?

Over the years, Hershey entered into numerous licensing agreements to expand its product portfolio beyond confections and cocoa, Savo explained. Most notably, Hershey partnered with General Mills to release Reese’s Puffs cereal in 1994.

More recently, Hershey and International Delight released a canned and then glass-bottled Reese’s Iced Coffee, following a previous collaboration on a 64-ounce carton version of the drink.

Last fall, Golden West Food Group and Hershey entered into a licensing agreement to release a series of chocolate-covered frozen fruits — including Reese's Frozen Fruit Banana Slice, Hershey's Cookies ‘n’ Creme, Hershey's White Creme & Milk Chocolate Frozen Fruit Blueberries and Hershey's White Creme & Milk Chocolate Frozen Fruit Raspberries.

The frozen fruits launched exclusively at Walmart, but are now rolling out nationally, and consumers “can expect to see more around that line, including innovation and some new flavors,” Savo noted.

Looking ahead, Hershey is exploring more frozen treats to tap into the ever-growing permissible indulgence trend, he added. Over the years, Hershey has released a variety of better-for-you options, including plant-based Reese’s Peanut Butter Cupsco-branded protein bars and organic chocolate bars.

“We are also excited, as we look to next year to continue to explore the better-for-you spaces, and ways in which we can bring a treat to an everyday snacking occasion — maybe combined with a better-for-you option within that treat — so within the refrigerated space and even on the dry shelf. And then we are also further exploring the frozen-dessert category, beyond our great portfolio of frozen ice-cream novelties and ice-cream products with Unilever. So, how else can we be a part of consumer's dessert occasions through the use of the freezer door,” he elaborated.  

Waking up a ‘sleepy category’ with iconic Hershey flavors, product innovation

While being “somewhat of a sleepy category,” the hot cocoa market is ripe for flavor innovation and new formats, Cheryl Carbone, senior brand manager of Sweet Portfolio at Kent Precision Foods told FoodNavigator-USA.

The US cocoa market — which consists of powder and mixes — is estimated to be worth $4.63 billion in 2024, with $2.78 billion in sales coming from out-of-home occasions (i.e., foodservice and restaurants) and $1.85 billion from retail sales, according to Statista data. The cocoa market is expected to reach $9.30 billion by 2029, growing at a 2.17% CAGR between 2024-2029, Statista added.

“Hot cocoa has been somewhat overshadowed by the growth of coffee and all the focus on coffee, so that is one of the challenges the category has,” Carbone noted. “Household penetration for cocoa is much smaller than coffee, but people do still want flavor variety and uniqueness.”  

She added, “These brands really set up that expectation for consumers and really can create a lot of excitement that millions and millions of consumers who already love these products in their candy form. We are giving them that same opportunity to enjoy them in a different format at any point of the day.”