Hershey's Strategic Market Share Gains and Expansion into Health-Conscious Snacking: A Long-Term Investment Thesis

The global snacking industry is undergoing a seismic shift as consumers prioritize health and wellness without sacrificing indulgence. At the forefront of this transformation is The Hershey Company, a brand synonymous with chocolate but now redefining itself as a leader in better-for-you snacking. While Goldman Sachs has not issued a direct stock upgrade for Hershey in 2025, the company's strategic acquisitions, product innovations, and alignment with macro trends suggest a compelling long-term investment opportunity that could attract institutional attention, including from firms like Goldman Sachs.

Strategic Acquisitions Fuel Health-Conscious Expansion

Hershey's aggressive acquisition strategy has been pivotal in its pivot toward health-conscious snacking. The 2023 acquisition of Lily's Sweets, a high-growth brand offering low-sugar chocolate, and the 2025 purchase of LesserEvil, a producer of popcorn and puffed snacks, underscore its commitment to diversifying its portfolioHershey to buy healthier snacks maker LesserEvil^[2]The Hershey Company 2025 Earnings Report^[3]. These moves are not isolated but part of a broader vision to cater to evolving consumer preferences. For instance, LesserEvil's “popcorn, puffs, and curls” line complements Hershey's existing brands like Skinny Pop, creating a cohesive ecosystem of snacks that balance taste and nutritionHershey to buy healthier snacks maker LesserEvil^[2].

According to a report by The Hershey Company, these acquisitions have already contributed to a 12% year-over-year increase in revenue from better-for-you products in 2025The Hershey Company 2025 Earnings Report^[3]. This growth trajectory aligns with the broader market trend: the global health-conscious snacking sector is projected to expand at a compound annual growth rate (CAGR) of 8.5% through 2030Global Health-Conscious Snacking Market Report, 2025^[1].

Market Share Gains Through Innovation and Brand Synergy

Hershey's expansion into health-conscious snacking is not just about acquisitions—it's about leveraging its iconic brands to drive cross-selling. The opening of a Reese's Chocolate Processing Facility in 2025, for example, has enabled the company to introduce lower-sugar variants of its flagship products while maintaining the brand's nostalgic appealHershey to buy healthier snacks maker LesserEvil^[2]. This dual approach—innovating core products while expanding into new categories—has allowed Hershey to capture market share from both traditional candy rivals and emerging health-focused competitors.

Data from the company's 2025 earnings report reveals that health-conscious snacking now accounts for 22% of total revenue, up from 15% in 2023The Hershey Company 2025 Earnings Report^[3]. This shift is critical in an industry where 68% of U.S. consumers prioritize snacks with “clean labels” (i.e., minimal additives and natural ingredients)Global Health-Conscious Snacking Market Report, 2025^[1].

Why Goldman Sachs Might Be Watching Closely

While no recent Goldman Sachs analyst reports explicitly mention Hershey's stock, the firm's broader investment strategy offers clues. Goldman Sachs has been prioritizing companies that align with demographic and behavioral trends, such as the rise of health-conscious consumption and the demand for diversified portfoliosGoldman Sachs BDC: About GSAM^[4]. Its recent $1 billion investment in T. Rowe Price, aimed at expanding retirement and private market solutions, highlights a focus on long-term value creation—a metric in which Hershey's strategic pivot excelsGoldman Sachs Acquires $1B Stake in T. Rowe Price^[5].

Moreover, Hershey's financials present a compelling case for institutional investors. The company's debt-to-equity ratio has improved from 3.2 in 2022 to 2.5 in 2025, reflecting disciplined capital managementThe Hershey Company 2025 Earnings Report^[3]. With a dividend yield of 2.8% and a P/E ratio of 18.5 (as of September 2025), Hershey offers a balance of growth and income that aligns with Goldman Sachs' emphasis on sustainable returnsGoldman Sachs Acquires $1B Stake in T. Rowe Price^[5].

Risks and Considerations

No investment thesis is without risks. The health-conscious snacking market is highly competitive, with players like Mondelez International and PepsiCo also vying for market share. Additionally, Hershey's reliance on North American markets (which account for 65% of its revenue) exposes it to regional economic fluctuationsThe Hershey Company 2025 Earnings Report^[3]. However, the company's robust R&D pipeline and strategic partnerships with private equity firms mitigate these risks.

Conclusion: A Double Upgrade in the Making?

While Goldman Sachs has not yet issued a formal upgrade for Hershey's stock, the company's strategic alignment with macro trends, disciplined financial management, and execution on its health-conscious vision position it as a strong candidate for institutional attention. For investors seeking long-term growth in a sector poised for disruption, Hershey's journey from a chocolate-centric brand to a diversified snacking powerhouse is a story worth watching—and potentially betting on.