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Consumer bifurcation

from David Ruccio

Apparently, Hershey’s chocolate is another victim of the obscene levels of inequality we’re seeing in the United States.

Chocolate maker Hershey Co , long a staple of middle-class U.S. households, is getting squeezed as consumers either pay up for fancier sweets or seek more savings. . .

Hershey executives said the company is grappling with a growing gap between low and high-income households in the United States, which has changed buying patterns for many consumer goods. On the high-end, consumers are more willing to pay up for premium brands like Green & Black’s organic chocolate bars. On the low end, families hunt for greater discounts for products.

“We think the consumer bifurcation has been an important driver,” Hershey Chief Executive John P. Bilbrey said on an investor call, referring to the growing wage gap. Bilbrey said the company has secured more merchandising space for its products in the holiday season and expected trends to improve in the fourth quarter.

Companies ranging from Campbell Soup Co to Mondelez International Inc have spoken of similar pressures in the United States. Some have tried to introduce more products to appeal to low-income consumers at convenience stores and dollar stores.

“We are seeing a widening disparity between upper-income and lower-income” consumers, said Mondelez CEO Irene Rosenfeld in an interview.

  1. Michelle Bandor
    October 29, 2015 at 3:51 pm

    Not only is there the income gap, but also a quality “gap” with Hershey’s products. Have you read the ingredients list in the average Hershey Bar? Also, there should be some differentiation between “educated but low-income” consumers. More consumers are aware of questionable ingredients in the products they are buying. Those of us with less income will reserve our purchases for the better quality, better tasting product when we can. I look for sales and deals on the premium product. I stopped buying Hershey products a year ago.

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