Hershey CEO on AI, Speed, and Cultural Relevance
Kirk Tanner, CEO of The Hershey Company, discusses leveraging AI for sales efficiency, navigating GLP-1 consumer shifts, and maintaining cultural relevance in a 132-year-old brand. The analysis covers strategic integration, premiumization trends, and the importance of face-to-face consumer empathy.
Strategic Agility in Legacy Brands
The Hershey Company is undergoing a significant strategic transformation under CEO Kirk Tanner, focusing on speed, cultural relevance, and technological integration. For a 132-year-old enterprise, the primary challenge is not just maintaining market share but accelerating the pace of innovation to match the rapid evolution of consumer preferences. Tanner emphasizes that the company must match the "speed of the world" to remain relevant, particularly in the snacking category where consumers seek both comfort and novelty.
AI and Operational Efficiency
A key driver of this acceleration is the deployment of AI within the sales force. Rather than relying on static schedules, Hershey utilizes AI to identify the highest-value opportunities in real-time. Sales representatives receive dynamic routing instructions, directing them to specific stores like Target or Walmart where they can execute targeted activities to build business. This shift from data collection to data-driven execution allows the sales team to be more dynamic and opportunity-based, significantly improving efficiency and impact.
Navigating Consumer Shifts
The company is actively adapting to macro-trends such as the rise of GLP-1 medications. Contrary to fears of declining candy consumption, Tanner notes that GLP-1 users are resilient and value control. Hershey is responding by expanding its portion-controlled portfolio and focusing on premiumization. The premium segment, while small, is growing three times faster than the category average, indicating a shift toward "affordable experiences" rather than bulk consumption. To understand these nuances, Hershey employs "empathy visits," where teams enter consumers' homes to observe real-time behaviors and pantry choices, providing qualitative depth that surveys cannot capture.
Cultural Relevance and Brand Health
Tanner stresses that cultural relevance is non-negotiable. Brands must continuously engage with current cultural moments to avoid decay. This involves not just product innovation, such as the Reese's Oreo collaboration, but also leveraging brand history, as seen in the upcoming Milton Hershey movie. The goal is to keep core brands healthy while expanding into high-growth categories. By integrating the company into "One Hershey," Tanner aims to present a unified front to retail partners, ensuring that the company acts as a growth driver rather than a fragmented supplier. This holistic approach, combining AI efficiency, consumer empathy, and cultural agility, positions Hershey for sustainable long-term growth in a competitive marketplace.
Key insights
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AI is transforming sales force management by shifting from static scheduling to dynamic, opportunity-based routing. This allows representatives to focus on high-impact activities rather than data collection.
Impact: Increases sales efficiency and store-level execution, leading to higher revenue per visit and better retail partner relationships.
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Cultural relevance is a critical survival metric for legacy brands. Failure to align with current cultural moments leads to brand decay and loss of consumer engagement.
Impact: Ensures long-term brand equity and prevents stagnation in a crowded marketplace, keeping the brand top-of-mind for younger demographics.
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GLP-1 users are not abandoning snacking but are shifting toward portion control and premium experiences. They value control and freedom in their dietary choices.
Impact: Guides product development toward smaller, higher-margin items, capturing growth in the premium segment which is expanding three times faster than the category.
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Qualitative "empathy visits" provide deeper insights into consumer behavior than quantitative surveys. Observing real-time habits in home environments reveals authentic decision-making drivers.
Impact: Improves the accuracy of product innovation and marketing strategies by grounding them in observed reality rather than self-reported data.
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Integrating business units into a unified "One Hershey" model strengthens relationships with retail partners. A consolidated portfolio allows the company to offer comprehensive growth solutions.
Impact: Enhances supplier-customer dynamics, making the company a more attractive and efficient partner for major retailers like Walmart and Target.
Action items
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Implement AI-driven routing tools for sales teams to identify and prioritize high-opportunity store visits in real-time. Replace static schedules with dynamic, data-based directives.
Impact: Boosts sales force productivity and ensures resources are allocated to the most impactful opportunities, increasing overall revenue efficiency.
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Develop a cultural relevance monitoring framework that tracks current cultural moments and integrates them into brand communications and product launches.
Impact: Keeps the brand fresh and engaging, preventing decay and maintaining relevance with evolving consumer tastes and social trends.
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Expand the product portfolio to include more portion-controlled and premium options, specifically targeting consumers using GLP-1 medications.
Impact: Captures growth in the premium segment and retains GLP-1 users by offering products that align with their desire for control and quality.
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Launch a qualitative research program involving confidential home visits to observe consumer behaviors and pantry choices directly.
Impact: Provides actionable, real-world insights that refine product development and marketing strategies, reducing the risk of misaligned innovations.
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Consolidate internal business units to present a unified portfolio to key retail partners, emphasizing the company's role as a growth driver.
Impact: Strengthens retail relationships and improves execution by offering a cohesive, comprehensive solution rather than fragmented brand-specific pitches.
Quotes
“The second you're not culturally relevant with your brands like Hershey, then you should be worried.”
“We've become much more efficient with AI tools, our sales force, choosing and deciding. All that's done for them so that it says, hey, Kirk, you've got to head to Target 7575.”
“The important thing for us is we've got to match the speed of the company with the speed of consumers and the speed of the world.”