US based chocolate giant Hershey may have successfully taken advantage of the consumer trend for dark chocolate but work still remains to be done to reinvigorate core brands.
The company, who produce Hersheys Kisses and the Reese's range, said yesterday slow single serve sales of standard brands and the continuing impact of product lines discontinued last year had caused a drop in quarterly profits.
This year profits for the quarter came to $93.47 million (€68.6m), in comparison to $122.47 million (€90m) in 2006.
Hershey hopes to mitigate the downturn with greater investment in core brands - already seen in the Reese's line, which has benefited from the addition of a new product, Reese's Crispy Crunchy.
Hershey president Richard H Lenny said: "Core brand growth is anticipated to accelerate as we move into the second half of the year. The combination of stronger consumer programming and more effective in-store support should deliver an improvement in retailer takeaway and sales growth."
Recently the company has been focusing on bringing new products to the health and wellness oriented chocolate market. Last year Hershey introduced its Cacao reserve line of single origin chocolates and, in March, announced that it would be launching an Antioxidant milk chocolate alongside Whole Bean chocolate products.
Yesterday Hershey said activity in the dark chocolate sector had helped net sales grow 1.2 per cent in the quarter while its Cacao Reserve brand had become the fastest growing new item at retail.
The growth in dark chocolate combined with a new drive to strengthen long-standing brands has led Hershey to remain optimistic about full year forecasts.
Lenny said: "As we look ahead to the balance of 2007, core brand investment, improved customer programming and innovative new products will enable the company to meet its objectives with momentum building throughout the year."