Hershey’s acquisition of a significant minority stake in Fulfil paves the way for the US confectionery giant to expand in Europe -- where it is currently poorly represented -- and sets the stage for the fast-growing Irish snack brand to assault the US market.
Hershey, the largest chocolate and snack brand in the US, has taken a minority stake in Dublin-based Fulfil. Hershey said that its venture model, C7 Ventures, provides it with new avenues for growth through the deployment of small capital investments in disruptive or emerging platforms focused on new occasions, new technologies and new go-to-market opportunities.
“Successful companies evolve and engage consumers in new and different ways,” said Mary Beth West, chief growth officer. “As we continue to expand our snacking portfolio, our innovation agenda takes a balanced approach across investing in core brands and experimenting with new business models. This includes creating new platforms through R&D, strategic acquisitions and investments in businesses that are sitting at the cross section of new consumer snacking needs.”
Hershey said the partnership with Fulfil will “create opportunities in new occasions among new consumer segments and markets”.
Hershey, which is celebrating its 125th anniversary in 2019, has more than 80 brands around the world that drive more than $7.8 billion in annual revenues, including iconic brand names as Hershey’s, Reese’s, Kit Kat, Jolly Rancher, Ice Breakers, SkinnyPop and Pirate’s Booty. It has yet to conquer Europe, however. In July it reported that consolidated net sales in the second quarter of its financial year rose to $1.77 billion, of which $1.57 billion was generated in the US and Canada.
The move also points to further aggressive expansion from Fulfil
Fulfil sold its first bar in January 2016 in Ireland. It has since entered the Middle East and Australia after securing mainstream listings in the UK and expanding across Europe, even launching in Iceland.
Fulfil has been doubling its sales each year and industry sources expect it to deliver consumer sales of close to €100 million this year. That would make it the second largest confectionery brand in Ireland by sales behind Cadbury/Mondelez.
Fulfil aimed from the off to be a disrupter brand. It has outsold many traditional chocolate snack bar brands in the UK and Ireland and has been named a top 50 consumer brand in Ireland. It has mainstream listings at WHSmith, Tesco, Sainsbury’s and Asda.
With 12 flavours in two 40g and 55g sizes, the brand has close to 100% distribution within retail, convenience, petrol, retail and sports nutrition channels in Ireland, and 52% weighted distribution in the UK.
Brian O’Sullivan, CEO of Fulfil Holdings said: “This incredible success has come as a result of disrupting the traditional snacking market by delivering great-tasting bars with nutritional benefits—high protein, low sugar and essential vitamins.”
O’Sullivan, the former head of the Cadbury brand in Ireland who has also held a number of senior positions at Mondelēz International in Switzerland, added: “Our objective is to deliver great-tasting, nutritional snacking products to consumers worldwide. Over the last 18 months, we have built a highly capable management team and have developed an aggressive expansion strategy based on a thorough understanding of our target consumer. I am delighted that The Hershey Company with its scale and knowledge of snacking built over 125 years has seen the opportunity that Fulfil poses. Its investment will enable our expansion strategy and is an exciting milestone in what has already been the incredible journey of Fulfil.”
The company is not yet in the US. In 2017 its head of export Eoghan Webb told ConfectioneryNews: “The US market will take time. We know people are buying our products on Amazon and importing.”
He added that the key to the success of its high-protein chocolate bars had been taste. “It’s very close-tasting to confectionery products, so not only are we growing the healthy category, but we are also bringing in people who have abstained from the confectionery category because of high sugar and health.”