Business Strategy and Outlook| Erin Lash, CFA |
Wide-moat Hershey's dominance in U.S. confectionery is undeniable (46% share of the chocolate aisle versus just 1% for private label, as cited by the firm, according to IRI). And we don't think consumers’ penchant for indulgent fare is showing signs of waning, as evidenced by the 14% organic growth marks Hershey chalked up in the second quarter. But from our vantage point this isn't merely a byproduct of a favoarable demand environment. More so, we applaud the strategic focus CEO Michele Buck has brought to bear over the past five years--ramping up investments in its core domestic brands while pulling back in its international arm (high-single-digit percentage of total sales, where we surmise it lacks a competitive edge).