How Hershey is preparing for a different Halloween amid COVID-19

Yahoo Finance’s Brian Sozzi and Alexis Christoforous look ahead to Halloween and discuss how business will be different this year with Hershey's Global Chief Sales officer, Phil Stanley.

Video Transcript

ALEXIS CHRISTOFOROUS: Calendar might say August, but a lot of companies already have their eye on the fall, especially the upcoming holiday season, among them Hershey, which is busy planning for what could be a very different Halloween. With us now is Hershey's Global Chief Sales Officer, Phil Stanley. Good to see you Phil. Tell us what Hershey is expecting. What might Halloween look like during a pandemic?

PHIL STANLEY: I think we all know Halloween will be celebrated a little different this year. But I think, you know, what we're seeing is that we're getting an earlier start, so we're working really closely with our retailers. And you know, product's actually already out there in some of our key channels. We're actually seeing really strong trips.

And so when we talk to consumers, 58% of consumers still say that trick or treating is important. If you think about that last year, that number was 64%. So if we're going to find a way to trick or treat, and trick or treat safely, and if they can, they're going to do different things, like reverse trick or treating, treasure hunts. And so we feel confident that with our planning and our capabilities that we'll have a good Halloween season.

ALEXIS CHRISTOFOROUS: I believe trick or treating makes up about half of Hershey's Halloween candy sales. In anticipation of this being a different Halloween, a Halloween like we have never seen before, are you making less candy so that you're not going to be left with a bunch of inventory?

PHIL STANLEY: No, you think, you know, Halloween's one of those interesting seasons, where over 55% of the product are everyday products that come in seasonal cases. And so if you think about the season, in a 10 week season, you know, there's an early part of the season, which is about 20% of the sales. And it's really you know, hey, I see the product in the store and it's a treat for me and my family.

And then you get to that midseason, where it's a lot about activities, baking, decorating, and then the final piece of the season is trick or treating. And so we haven't produced less products. We've worked really close with our retailers to make sure that we start the season early, but then also create plans that meet consumers needs.

And you know, we're literally talking to consumers every week to understand how they're feeling about the seasons, and with our capability around distribution, execution, and adjusting our media, we think that we can meet consumers based on, you know, how they're going to celebrate. Because we do think geographically there could be some differences based on how things are going in certain parts of the country. And so we're preparing to make sure we can work with our retailers, depending on what that looks like.

BRIAN SOZZI: So Phil, I walk into my local Target or Walmart, I see more space being allocated to household cleaning products, more space being allocated home improvement, a little less for seasonal this year. How does the sell in this share of product look like at some of these major retailers compared to last year?

PHIL STANLEY: Yeah, I mean sell in looks strong. The good thing at this point in the year, we have real strong visibility to our orders and how the product is going to flow. And I can tell you that you know, we're really on plan with what we expected for the Halloween season, and we feel that based on our planning with our retailers that we'll have the space to execute.

You know, typically we think of, like I mentioned, a 10 week season. But if you go to some of your local retailers now, we're already executing. And you know, what I've seen in their early data is that, you know, these products are being purchased. And as I mentioned, a lot of this is everyday products. So we've actually already seen strong trends on pack types like snack size and assortments, and that trend is just continuing into the early part of the season.

ALEXIS CHRISTOFOROUS: Phil, bigger picture here. When you look at your product lineup, I know some of your competitors are looking at brands and saying you know what, we're going to retire that brand, or we're going to take a step back from that brand. Are you re-evaluating, and are there any brands that you might be changing or we might not see going forward?

PHIL STANLEY: No, I think, you know, again, as part of our business we're always evaluating our portfolio and making sure that, you know, we have the right brands, products, and pack types that meet consumer's needs. I think the good part about Halloween, if you think about it, we have three of the top five brands, Hershey's, Reese's, Kit Kat, and we have some great innovation around those brands.

If you think of Reese's, we have a product called Frankencup where the bottom of the Reese's cup is green. And so we're always looking for ways to create excitement in the category. Let's be clear, this is a fun category, very resilient. The results we saw at Easter in the, you know, sort of the strongest part of the pandemic, you know, in segments like Easter egg hunts that we thought we would be down dramatically, that was some of our best sell through, because consumers found a way to celebrate the season, and we believe they'll find a way to celebrate Halloween.