Hershey’s Salty Snack Strategy And How Dot’s Pretzels Changed The Game

The Hershey Company, known as a confectionery giant, is transforming itself into a snacking powerhouse through savvy acquisitions, bold brand building, and strategic retail partnerships. With salty snacks currently representing 10% of Hershey’s total revenue, the division has set an audacious goal to double that contribution over the next decade. “I consider myself the architect behind our high-growth agenda and the driving force to ensure that we are really fulfilling our full potential,” said Veronica Villasenor, president of Salty Snacks at Hershey. A key to its growth is betting on consumer insights and acquisitions like Dot’s Pretzels.

Dot’s Pretzels Drives Triple-Digit Growth in Stagnant Pretzel Category

The Dot’s Pretzel acquisition in December 2021 represented a fundamental shift in Hershey’s growth strategy, marking the company’s evolution from simply acquiring brands to becoming manufacturers in the salty snack category. “Unlike previous acquisitions that focused solely on brand assets, the Dot’s deal included the entire manufacturing infrastructure for pretzels, giving Hershey deep knowledge and capabilities in seasoning and innovation processes,” explained Villasenor.

The manufacturing expertise proved transformative for the 130-year-old confectionery company, as Villasenor noted her visits to production facilities revealed employees’ pride in joining the Hershey network and contributing to the company’s diversification beyond traditional chocolate products.

The acquisition brought not only a high-growth brand but also the technical know-how to innovate within the pretzel category, enabling Hershey to develop new products. “The (pretzel) category was boring, just to be honest. Dot’s came to really fulfill a consumer pain point by bringing bold flavors into pretzels,” said Villasenor.

Hershey has expanded its innovation pipeline with the launch of Buffalo-flavored Dot’s Pretzels in response to younger demographics seeking bolder flavors. Earlier this year, Reese’s filled pretzels were launched and are poised to disrupt a $400 million filled-pretzel category market previously dominated by private label offerings.

The strategic approach of acquiring both brand equity and production capabilities positioned Hershey to compete more effectively against established salty snack manufacturers while maintaining the agility of an emerging player in the category. Dot’s is growing three times faster than the total category, representing 100% of the growth. With continued flavor innovations based on consumer insights, the potential to take market share is evident.

Hershey’s Global Customer Insights Center (GCIC)

The customer engagement center is a shopper-led insights facility that fosters retail partnerships and drives category growth. The GCIC is based on consumer insights and input from retail partners in both the confectionery and salty snack categories. “Today’s bifurcated consumer behavior creates a dual strategy challenge,” explains Villasenor, who plans to address the premium and value-seeking consumer segments with a diversification of product offerings. Nearly half of Americans (48.8%) snack three or more times a day.

Another growth segment for consumers who are seeking on-the-go convenience and portion control options is the multi-packs, which represent $7 billion in the salty snack category and a $20 billion opportunity across all snacking.

Health-Conscious Consumers Fuel Hershey’s Premium Snack Demand

“Two-thirds of total consumers in the U.S. have claimed that they are committed to a better-for-you snacking behavior – that’s pretty significant,” explains Villasenor in discussing the strategic decisions around healthy snacks. Health and wellness represent a significant growth opportunity in the salty snacks market, growing much faster than the overall marketplace.

The U.S. snack food market generated over $50 billion in sales in 2024, making it the world’s largest driven by Americans’ diverse snacking habits. Healthy snacks are projected to grow by 13.6% worldwide by 2026 (compared to 2024).

Based on the wellness consumer trend, Hershey has directly shaped its portfolio strategy, leading it to focus on brands like Skinny Pop and Pirate’s Booty that already appeal to health-conscious consumers. Additionally, the company is expanding this platform with the pending acquisition of Lesser Evil, another better-for-you brand, demonstrating its continued commitment to staying relevant with these enduring consumer health and wellness trends. “Consumer data shows 40% of U.S. consumers are actively seeking better-for-you snacking options for specific occasions,” said Villasenor.

Hershey’s Confectionery Expertise Translates To Salty Snacks Success

Hershey’s salty snacks division is successfully diversifying and modernizing while leveraging its core strengths from the company’s sustained success in confectionery. “We’re the youngest sibling in the family that has the backup of an $11 billion company to help us compete with established players,” stated Villasenor. By combining the resources and expertise of an established corporation with the agility and innovation mindset of a startup, Villasenor and her team are building a sustainable growth engine that will have broader implications for the consumer packaged goods industry. Hershey’s Salty Snack division focuses on consumer-centricity, strategic brand building, and retail partnerships, positioning it well to achieve its ambitious goal of doubling revenue contribution over the next decade.