Mike Blake/Reuters
- The Hershey Company may see a boost sales thanks in part to the coronavirus pandemic, according to a March 18 note from Credit Suisse.
- Analysts with the bank said the chocolate giant tends to see a spike in demand during crises, like the recession between 2008 and 2010.
- "We also expect the increase in impulse purchase occasions at grocery stores to offset declines in alternative channels," the bank's analysts wrote.
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Turns out, people don't lose their sweet tooth in a crisis. So, while the coronavirus pandemic may be adversely affecting businesses and industries around the world, the Hershey Company could see a boost to sales.
Credit Suisse upgraded the chocolate manufacturing giant's stock to "outperform" Wednesday, saying that the "business has proven resilient during all types of social and economic backdrops." There's a precedent for consumers turning to candy for comfort during hard times. Between 2008 and 2010, Hershey's organic sales spiked 4.7% per year, according to Credit Suisse.
"We also expect the increase in impulse purchase occasions at grocery stores to offset declines in alternative channels," the bank's analysts wrote in a March 18 note.
Analysts Ariel Altaras, Jacob Nivasch, and Robert Moskow added that they didn't anticipate that consumers would stop craving Hershey products during the Easter season, despite the epidemic. They also wrote that Hershey's "duopoly" with rival Mars ensures that the company doesn't have much to fear from third-party disruptors.
The biggest threats facing the Pennsylvania-based sweets business include health-conscious consumers abandoning the confectionery category altogether and "business disruption or weaker impulse purchase occasions during the spread of COVID-19."
But for now, whether it's a virus-themed chocolate Easter egg or on-the-fly purchases to reward a stressful grocery store run, many consumers seem set to continue to indulge their taste for sweets during the pandemic.
I'm just going to pack the car with camping essentials, a fishing rod, 10 slabs of beer, and a heap of chocolate, then head out to a remote and secluded lake and return in four weeks. I'll probably come back with diabetes and a fucked liver, but at least I won't get #coronavirus.
- Dan Clark (@DanClarkSports) March 13, 2020
I have stockpiled wine and chocolate. Apparently friends want to come self-isolate with me. #coronavirus
- Sam Smethers (@Samsmethers) March 13, 2020
Coronavirus Cupboard Check: 15 lbs of pasta (what???) and nearly that much chocolate (totally defensible) - I'm okay for a bit. pic.twitter.com/kk6WHZddaS
- Chris Jansing (@ChrisJansing) March 14, 2020
Coronavirus Quarantine Checklist:
1. Toilet Paper
2. Paper (for writing, not the bum)
3. Pens and Pencils
4. Coffee
5. Chocolate
6. Pantry Filled With Story Ideas
...oh wait, that's what I live off of everyday.#writingcommmunity
- Darren Kinash (@BravestBeaver) March 11, 2020