Hershey Company (The) (HSY) Q1 2026 earnings call transcript

I would now like to turn the call over to your host, Anuri Noor, Vice President of Investor Relations for the Hershey Company. Thank you. You may begin. Good morning, everyone. Thank you for joining us today for the Hershey Company's first quarter 2026 earnings Q&A session. I hope everyone is at the chance to read our press release and listen to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties.

These statements include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings.

Good morning, Andrew. Good morning. I was hoping maybe to focus in a little bit on North America Confection Area to start. I think in the press release, you mentioned that lower year-over-year CMG market share due to increased marketplace competition. And I know investors are understandably sensitive to this, just given the significant drop in cocoa prices of late and the concern that this could lead to sort of incremental competitive activity to spur volumes in light of elasticity. So I was maybe hoping you could dig into just what you're seeing in the marketplace a bit more, and what would you expect as some of the activations and tentpole events sort of kick in? And would you, I guess, anticipate that Hershey returns to share growth either in 2Q or as we move through the year?

Yeah, great question. Yeah, well, I'd start with competition continues to be highly rational. So it's no change in the pricing environment. I just want to start with that. We have seen increased competitive innovation and merchandising from both mainstream and premium competitors. That's what makes this category so attractive to consumers. It's one of the reasons it's so resilient.

And so some of that happened a little earlier than we expected. We feel really good about our position as we exit spring resets in a net positive position across items and innovation and key channels. And our spring and summer merchandising programs ramp up. Premium chocolate continues to be that segment that grows really well, but we are charging into that space aggressively, and we have plans in the back half this year to have some innovation, and we'll continue to develop that. But overall, yeah, we're in a competitive environment. We feel good about where we're going. We have momentum planned for the second half of the year that we feel really good about, but it is a rational pricing environment, Andrew.

Yeah. I mean, I look at the, you know, the category in the first quarter. Overall, the category in confection was really resilient, growing high single digits as expected. Overall, Easter was good for us. Category sales declined really due to the two fewer weeks versus last year, but our sell-through was really strong and outperformed our expectations. I'd say that's the notable part given that Hershey's share, you know, we're a share leader at the season, and we typically index much higher, and so the two weeks, you know, was a big impact on the overall season. But we're very happy with our performance and the sell-through that we saw. Those exceeded our expectation, and our share was also ahead of our expectations coming out of Easter.

Thanks so much.

Yeah, really, really relevant question. Thanks for that. Consumer behavior, let's just kind of start with, you know, this quarter and then as we move through the year. But consumer behavior remained really steady throughout the quarter, with shoppers making thoughtful choices. GLP-1 trends remained consistent. SNAP impact was mild, given waivers were limited to five states, and higher gas prices had minimal effects.

We continued to monitor those very closely, but overall, the macro environment is tracking within our expectations of the year. When we talk about SNAP specifically, we realistically modeled the possible effects right from the beginning. In the first quarter, the five states that were in place, which means the overall impact was, as I mentioned, pretty mild or minor. In those states, the effect on both the category and our business aligned with our estimates, which gives us much more confidence for the full-year outlook. Now, where implemented, we do see considerable consumer confusion, and it's possible that that would improve over time.

So we plan for this headwind to increase over the course of the year with SNAP, and we will adjust our plans to meet the needs of the consumer with portfolio impact types. But it's in our assumption. I think that's the important thing. We're not seeing anything that's kind of out of how we've modeled the year and our outlook for the year. So I think, you know, that stays on track as far as SNAP goes.

Yeah, I'll kick that over to Steve for that one.

Sure, yeah. On the elasticities, you said it. We continue to model what we had before that point. We're pleased to see it still holding. We have some things that will be coming to market. Price pack architecture, for example, is hitting shelves right now. We'll continue to watch that to see if elasticity has evolved as they can sometimes. Right now, right in line with what we've modeled and expect that to continue. And then relative to Q2 retail or Q2 sales expectations, yeah, the biggest pieces on the organic side were the timing issues.

Two parts to that, you know, Kirk said Easter sell-through was strong, and so one upshot from that was earlier shipping of some of our spring programming, including s'mores, for example, which is actually getting activated as we speak. That's earlier than we typically would have seen. We also had a little bit of pull forward internationally. As some customers are doing, you know, playing a little bit of defense trying to get ahead or offense trying to get ahead of potential disruption in the Middle East. So those were the two big pieces that sort of pulled things forward from our standpoint. Nothing structurally different relative to Q2 expectations.

Yeah, it is expected to be slightly down in Q2 due to that timing that we just talked about.

Sure. Well, we're expecting in Q2 gross margins to increase by nearly 300 basis points versus the prior year period. So that's where you really start to see the inflection. And then as we get to the back half of the year, you know, we expect something greater than 500 basis points. And again, we've got the year pretty well planned out, so I'd say we have good visibility to that. But that's how that inflection starts in Q2 and then accelerates in the back half.

Yeah, good question. Yeah, we have confidence in H2, driven by a few things. One, we see a really strong seasons plan for the second half. Our tentpoles will deliver a full point of growth. Americana, the Hershey movie, we've got a lot built into that, a lot of support from our customers. Resets have been really important. So gains across several channels, masks, grocery, dollar, drugs. So we see real positive position coming out of the spring resets, which is important to us. And then innovation. We've got good innovation. We'll have a big innovation on Hershey's in the fall as well that we're really excited about. It gets us into that accessible premium space. So that is really important.

Now, of course, we're watching the macros just like everyone, but when we think about what we can control, we feel really good, and we have a lot of confidence in where we're going as we ramp up our execution and deliver against our plans. And so we feel good about H2. Again, we'll keep an eye on the macros and control what we can control.

Yeah. One thing that I would say on snacks or on our Salty snacks is that's primarily driven by private label. And so, you know, our core brands in Salty are of nearly 10%. So that is not the issue. Now, as you know, as we brought those businesses in, we had a private label business. That's getting smaller in our business over time, so that's a bit of it. Our salty brands are doing exceptionally well.

Yeah, and I'll just say in terms of the profitability side, you really pointed to the two things. We had a couple of discrete things. The voluntary withdrawal was actually immaterial in total, but that combined with the delayed opening of the D. C. We spent more on logistics, trying to, you know, with a fast-growing business, trying to maintain strong service. And so those additional costs were incurred in the quarter.

They're done. And so now we're in a better spot than we expect operating income to grow and increase by double digits for the year. So, you know, small speed bump in the first quarter, but past it and back on track.

That'll be the biggest factor. You know, we are going to have some amortization that will come along with the Lesser Evil acquisition. So that's sort of in the base. And there's some mixed impact with Lesser Evil in the mix at a kind of total salty level. But those are expected, and aside from that, you kind of on the core business, we'll continue to see that margin improvement over the course of the year.

Yeah, I think about those in two things. Space in the number of new facings, new SKUs that we have in the sets across the primary channels, across masks, dollar, drug, and grocery. That's a big part. So winning at the shelf is the first thing I think about, and we're in a positive position there. The second is the support that we're getting from retailers on the perimeter with our tentpole events. I think the combination of both winning at the shelf and winning on the perimeter, supported by our retail sales team, is really how we're thinking about that. That's really the one-two punch of the momentum that we see in the second half. That shows up in tentpole and season events, too, on the perimeters and the support that we get.

But it really is both, winning across CMG and SALTY for both shelf space wins and perimeter inventory. And we're tracking that. We're very disciplined about looking at that every single week. So we feel really good about where we're going.

Yeah, we made those comments early in Q1, right? We saw very little impact because it was a later event. I think it really comes to how high the prices go and how long they stay. D-Store is the right question to ask. We look at that as well, and our confection business continues to perform in line with our expectation. We look at things like our immediate consumption business, and those continue to do well through this time. Again, we know that this is a longer issue that could have a bigger impact, but right now we see that performance standing in check, and so we feel good about that. But we're always staying focused on that and looking for other things that we can do with our retail partners in the convenience channel to keep the business front in mind.

We know that when high gas prices happen, frequency goes up with consumers. So they come to the gas station more. They buy less. They are purchasing less, but the frequency goes up. That keeps the channel robust, at least with our category. And again, we continue to see results as expected right now. So we're feeling good about it, but we'll stay focused on it. I'll stay very focused on this.

Yeah, I'm happy to take that one. So far, we're really not seeing a big impact. Again, in the hedging program and our commodities team, some of these impacts and commodities are managed through that group. And so we've got good visibility really through this year and in some cases even beyond. And so now, having said that, you know, like Kirk said, if it looks like it's going to be prolonged and it's going to be significant, then we'll be looking further out at some of the implications. But right now, from everything we can see, if we're in a good spot, feel well covered for 2026.

Yeah, I mean, the right questions. When we get down to the details of how we execute at retail, I think that's really important, David. We start with the number of SKU gains that we are getting across mass grocery dollar, and we're building that into kind of a pipeline. We are deploying the stand-up bags versus LifeLab bags, so that is something that is consumer preferred. It elevates. We've tested that. That is well-received by consumers, and it just drives visibility, It's something that makes the category easier to navigate, shop accessible, all those things that category management drives. So that's the first. So we're looking at how productive the shelf is. We're measuring on-shelf availability just as our customers do, and we go over that every single week.

So that intensity around the shelf is really important. The second area is this perimeter, and what does tent pole activation on top of seasons do? We measure inventory, points of interruption on the floor, amount of inventory that we have on the floor, and location in the store. I think that helps us drive what's incremental, how this delivers against the plan, how much growth we're getting into this place, and what new occasions we're driving. New occasions are like as we come into the celebration of the 250-year celebration of our country for the 4th of July, we are bringing Hershey Kisses, our Hershey Bars platform, our S'mores platform, and our Dots pretzel platform into that. So we're going after that new occasion, being a part of that celebration and a party.

That's incremental to what we have done in the past, and that's really the element of what tent poles brings. It is more activation on the perimeter, getting into more occasions and more moments that consumers are celebrating. And the combination of those two things is what gives us a lot of confidence for the second half of the year.

Yeah, we have a great foundation for seasons, but I think that we can be even more disruptive and looking for what consumers are looking for. As we go into Halloween, even this year, we feel really good about what we learned, and then what new things we can bring to consumers that they are looking for that make that season even more robust.

So that, as a leader in seasons, it's on us to be much more thoughtful about where consumers are going, continuing to modernize it, But we're building from a very strong base. But as I look at seasons in the second half, we feel really good. We can see the buys with our customers. We can see what's landing. And you can evaluate, hey, are we going to have a really good season? Is this going to be an okay season? We're feeling really good about the back half seasons with what we've been able to partner with our customers with.

Yeah, you've got the biggest pieces. We said slightly down in Q2 due to the timing. Easter fell through with strong, so the Q2 impact is bigger than anticipated. That and that little bit in international that we talked about are really the two biggest drivers of pulling forward.

Yeah, I'll just share a little bit of how I think about it. So Easter was a significant timing issue, right? So we saw that. We saw Seltzer go really well. That pulled a few of our programming into quarter one. But then if I look at what success looks like, the overall consumption trends are staying consistent. So once you get through the overlap in April, you'll see momentum pick up in May, and you'll see momentum pick up in June.

So you think about those consistencies. If you remove those one-time events, I think you're going to see very consistent performance on consumption, sell-through, and execution. So I'm looking at April, the impact of Easter, May with some momentum certainly building, getting back on track in June following that.

Yeah, we feel good about what we're seeing from an increase versus a year ago versus what we've seen in the last couple of years. So I'm confident that this is a win for us. It's a win for the portfolio that we have, plus some of the moves we made for making the gundal a much more shoppable and inspiring for consumers. So when you package it all together, number of facings, stand-up, merchandising, and how we were merchandising with category management insights, I feel really good about where we're going this year versus last year, yes.

Yeah. Well, overall, innovation we feel really good about. Let me talk about Hershey, this elevated experience. This is a truly elevated. Maybe, Robert, if you were at Investor Day, you had the opportunity to try this. I absolutely love these products. Hopefully you loved them. I love them. They're an important part. I think that when you look at innovation, it is a collection of those things. We have high expectations for that brand, and we think it's right in the sweet spot of what Hershey can deliver. That's on deep consumer research and understanding and testing. So we know that we have the opportunity with Hershey to nail it and knock it out of the park with that innovation.

But we also look at innovation in totality. So across our portfolio, across our sweets portfolio with Jolly Rancher, we also continue to see Reese's Oreo be a standout. You add on the Hershey innovation, and you see that. Plus then we have a big Hershey experience with Hershey Movie coming out in quarter four. But it's the collection of those things is how we model and build our business. It's not reliant on one thing. It is the collection of those things that make the business strong. Having said all that, we have really good expectations for this elevated Hershey experience, and we are launching a product that consumers in the testing have loved.

It was in my opening comments. It performed much faster than the category. That continues. There was some really good innovation on heatwave, etc. Now, we've launched a new item with the Shack lineup. That will give us some momentum later this spring and in the summer. So we feel good about, you know, where we are with Suites. Jelly Ranch will continue to be a hero in the space. We've got a strong program around Twizzlers this summer. And we have a robust pipeline in 27 and 28 across Suites that we'll share. We've shared some of the suites portfolio and the innovation that's coming, so we're going to continue to invest in this. When we talk about investing in R&D, there's some specific areas that we're focused on.

One is premium. Two is suites. Three is better for you. And you'll see us continue to make that pipeline much more robust in the future. And, you know, we've seen that. That is in our R&D right now, and we've seen that pipeline, So we feel really good about where we're going.

Yeah, hey, thanks for the question. You know, I was just going to go back to one of the key drivers of the confection category in particular is that this is a emotional category. It is a treat, not a meal. And I think that's playing out with GLP-1 users and the overall health and wellness trends. Consumers on these drugs, specifically GLP-1, continue to enjoy the category in smaller portions. We know that. Our research supports the confection category is relatively insulated compared to other food categories. Categories. Our framework for estimating the GLP-1 impact includes scenario assumptions for both the near and the long-term horizon for adoption rates. So we have been monitoring calorie reduction, user lap rates, and other behavior changes.

Now, the accelerated adoption rate alongside affordability and new formats are well contemplated in our outlook. So we spend a great deal of time understanding this. It is in our outlook. It is in line with what we've seen and what we expect, but we'll continue to do this. But this is something that we are continuously monitoring. But overall, again, the category is about a treat. It's still being enjoyed through this. Again, it's about 40 calories per day, two to three servings per week for the average American on confection. So that's just the scope of what we're seeing, and so that gives us the confidence of where we're going here with this macro.

Yeah, sure. I'd be happy to take that one. So, as I said, elasticities are running favorable. They have so far. They continue to. And it just points to the resilience in these categories, especially in instant consumables, refreshment, and seasons. We've talked in the past how seasons are so precious to consumers. So, as we look out, we don't see a material change. It doesn't change. As we think about the outlook for the year, we're not changing the guide, so we're still inside the earlier guidance, even though the Q1 results look strong. And it's partly because we still have that price pack architecture hitting shelves as we speak. And we know elastisities can move, so I'll say we're being a little bit cautious there.

But we'll continue to monitor it over the coming quarters. We'll be in a better spot to take a look at the guide at the mid-year mark. We'll have most of the price pack architecture in place at that point and have a better B. But we're really encouraged by what we're seeing so far in the resilience of the consumer in the category.

Yeah, I think that is a great question. This really brings the best of demand creation and demand execution or demand fulfillment. So these moments like the 4th of July is typically where we did not participate. Between salty and sweet, we have this great opportunity to participate in these big moments of celebration that are relevant with consumers. So that's kind of the, you know, that's the motivation, the inspiration behind it. Now, what we've done is we've worked with our customers. We've put the demand creation together with the marketing, and then what we do is we bring that to life like we've never done before at the 4th of July, and we've activated that with our sales force.

Our customers are encouraged by this because, look, it just makes these events bigger in-store. It brings more retail theater to the store with our big brands like Hershey and Dots, and that makes the overall season better for the retailer. So that is kind of leveraging our strength as a business to bring more relevance to these holidays, and it gives us a chance to capture some of that share, that share of that occasion. And this allows us to go from a season into a tent pole, into a season, into a tent pole again. And that allows our sales force to be constantly focused on how they develop those big moments in retail. And, you know, our customers are very supportive of this.

It gives, you know, more for the shopper to engage with. But, you know, this is, I would say this is playing to our strengths.

No, I mean, there's enough gap between these that, you know, we're measuring incrementality, and the breadth of our portfolio allows us to play in these, you know, these tent poles and seasons without being redundant or cannibalizing each other. You know, we are the number one season executor in CMG. We have the largest share of seasons. So when you bring tentpoles to life, we're bringing them to life with different brands, different opportunities, and we're making them as incremental as possible. I would tell you a big collaborator in this is our customers. You know, our customers own the categories as well, and this is leveraging the best of what we have and the best insights that they have, and that's really what the magic is.

But right now, I feel like there's a really good cadence. So you'll see this summer, you'll see us execute the 250 anniversary. You'll see us execute s'mores and summer travel. Then you're going to go into Halloween, and there's a nice gap between those to have the sell-down. And then, you know, the build for Halloween, it really makes sense for retail.

Yeah, great question. We continue to see Reese's thrive in the UK and other European countries. Our plan is to continue to develop that. We have a win with Reese's plan that is working. We see innovation off that platform, and that is a real platform in the UK. We are leveraging imports and local manufacturing for some of the products. The plan is to scale Rhesus internationally, especially in the UK and Europe. Once we scale, then we will look to in-source. I think that is the natural progression of how we build that business and make it much more profitable. I would tell you what we've learned in the playbook that we've learned in the UK and Europe is allowing us to take it other places.

So I was just recently in Brazil. It's starting in Brazil. It's having the same impact. Brazilians love peanut butter. And so it is, again, we'll run that playbook and allow us to build that platform. It's also working in Mexico. Now we manufacture it in Mexico, so it's a little closer to home. But those are the playbooks that we are developing in one country or one market that we're able to take into other markets. And Rhesus has been very exciting for us in that regard.

Well, I think that's a great question. It's a high single-digit level of contribution to percent of sales for us. I think there's always opportunity, and I would tell you that our innovation strategy is one of focus, meaning we are innovating in those places that we have the greatest opportunity. For us, that is premium, sweets, better for you. I think I would think about that also in concert of growing our core brands. Our core continues to grow faster than the category. And so when you have a healthy core business in Reese's and Hershey, your innovation is even more meaningful. So again, innovation will be focused. I think there's always more for us to do, especially when we get more breakthroughs with sweets.

And premium and better for you, that will give us even further traction as we develop the portfolio. Now, on the salty snack side, we continue to innovate as well. Also a really important part of building our portfolio. We just recently launched the snack mix behind the Dots brand, and that's done exceptionally well. So again, that same model of healthy core and then innovation that's more disruptive in nature in salty, We are taking the snack mix category and disrupting it with dots and seeing a lot of traction with consumers there. I would tell you this company is very focused on raising the bar on innovation, and we have a lot of momentum in front of us.

All I would add there is one of the reasons we talked about incremental R&D investment coming to help build that capability and build that muscle for the future.

Yeah, there's a couple things. Our Hershey campaign, if you remember during the Olympics, was very well received, and that gave a lot of lift to the Hershey brand. That I think is really important. On Reese's, Reese's was the center of our Big Ten Poll event for March Madness. That allowed us to build inventory and get traction on the brand. When we look at programming behind creating demand for the brand Hershey's and Reese's, this is an example of how it comes to life and works, and it works on the core. You know, Q1 is just an example of how that can come to life.

Yeah, we still remain in the view that, you know, long term, COCO could remain above some of those really lower historical levels that we've seen. Now, we'll see how it plays out. So, I'd say long term, we probably have a somewhat cautious view. In the near term, you know, we continue to anticipate a larger surplus in 25 and 26, partly the diversification of the supply chain, strong crops, declining demand, continued expansion and new origins and so forth. So if that happens, if we would see COCO fall, as we talked about at the investor conference, we have ability to participate, particularly in 27 and beyond, in that downside. And so those would be things that could trigger upside opportunity to our 27 and 28 outlooks.

But we're watching the space closely, obviously making sure that we're managing the business for the long term in terms of hedging, but also in structures that allow agility to participate in downsides.

Sure. I'm happy to kind of take that. I think we talked a little bit about the conference in general about things that could go up, upsides or downsides for 27, and we kind of broke them into controllables and non-controls. I think that basket is still largely the same. You know, the things that we can control around innovation and media, ROI, tentpoles as we just talked about, elasticity to some degree, and of course continuing to deliver on productivity and cost. I think all of those things we continue to have high confidence on our ability to manage and execute. We do have some factors outside of our control. You know, we just touched on cocoa being one that could potentially be an upside.

We'll see where the market goes. And then the macro headwinds and, of course, competition. So far, and I will come to oil, as Kirk said earlier, from a macro standpoint, there is nothing worth seeing outside the bounds of what we would have talked about back at the conference. We didn't expect those areas to get better in 27, and that is factored into the outlook. With respect to oil in particular, it is pretty small exposure for us. The bigger impact would be indirect through packaging and so forth. And those impacts take time. So it does go back a little to what Kirk said of how high and how long would the oil price impact last. At this stage, sitting here, we wouldn't change anything as we look to 27 and beyond.

Yeah, I think it's just being cautious. You know, as I said, we're really pleased with the start to the year, be really confident about the balance of year items that we can control.

Elasticity, they can move around, but we like what we see, and our projection is still strong. But like we just talked about, oil price is kind of a new macro to keep an eye on, And in general, you know, there's still a lot of movement and evolution in those macros. So I think it's just a prudent approach. By the time we get to the mid-year mark, we'll have a lot more visibility on all of this and be able to take, you know, potentially a different position.

Yeah, it will continue to be a drag, and then we'll continue to communicate kind of where, you know, the brand performance is versus the private label. I mean, this is something that was planned, and it's something we're working with our customers on, so we feel really good about that. I think our focus is on driving meaningful volume and growth with our branded products, and we like where we're going. We are driving a significant amount of the growth in the category. So if you look at Salty, the drivers of growth are definitely Dots, Skinny Pop, Lesser Evil.

They're driving exceptional growth, and we see that continuing. Now, part of the private label, yes, that'll be a drag. But overall, you know, we'll be in a really good place full year on both top line and bottom line for our Salty portfolio.

Yes, absolutely. And that's a big growth. I mean, the business is relatively small compared to the rest of our business. That is an area that we are investing in. This is a space that consumers are in, and we're seeing a high level of growth, you know, reflected in our earlier comments. That will be, you know, that will continue to be a part. Now, our job is to build this business to be a much larger, more influential part of our business, and we're doing just that. We are investing in R&D, we are updating our formulas. You will see really good brand work across One and Fulfilled. We have also entered into a JV with Phytoky, which has breakthrough protein delivery that we really like to see.

And that R&D will be meaningfully different. We know that we have to be differentiated in this space. We feel really good about where we're going with the protein and functional business. Right now, we're seeing high, mid-single-digit, or double-digit growth on our business today, and we know we can build that for the future. More to come from us on this area. It's a small but mighty part of our growth, and you'll see the investment in innovation, And we'll have a lot more to talk about for some of these breakthroughs that we're working on.

Sure. Yeah, we are going to see some movements still quarterly. You know, our challenge always is season, season timing. I feel like forever we'll be talking about seasonal timing, quarter to quarter, variability related to that. But as we look through the balance fees, there's nothing big changing. We have more tent poles to plan for, you know, more activation to plan for. But we're going to, particularly as we get to the back half of the year and we start lapping, you know, some of the higher priced cocoa and commodities, we're going to see that. We will see that step up. We are going to see that play out over the course of the year. I would say there is nothing unusual to really point out in that sequence.

Can you say that again? I'm not sure I totally understood your question.

The difference is where they will disconnect is the investing in media, which will pick up certainly in Q2 and even in the back half. So that's the disconnect between, say, gross margin and operating margins as expected. So that's all part of the plan for this year. So that's where the two will have some deviation.

Yeah, you got it. Yeah, expectation for the full year is unchanged, still expect to see double-digit increase in marketing and advertising. We did have some movement between Q1 and Q2. Some of that was delayed non-working media development, which slipped into Q2. And then we've also tuned a little bit more towards spring activations in the working media. But overall, for the full year, no change in expectation.

You bet.

You got it. Good morning. Kirk, I just wanted to come back to premium chocolate. At Investor Day, there was reference to Brookside, and that seemed to be differentiated when it was acquired, but it ended up stalling out on competition. And then in premium trade up to Hershey's Bliss, that was a play on texture, but that faded after a few years. So I'm curious, when you speak to breakthrough now, is the plan here to essentially sort of outpace and out-texture competitors in the mass market and reset expectations for the mass market? Or is the target more so new consumers and channels that maybe have not been a traditional focus for Hershey? How do we think about that balance there?

Yeah, I think those are really relevant. You know, I think about premium. I think about accessible premium. Consumers are looking for new experience. That is not, you know, that's not changed. We have three brands that we love for this. One is Brookside, as you mentioned. We'll innovate on Brookside. We're seeing growth in Brookside. We also are investing in Cadbury. Cadbury has a lot of potential in this market. It is a premium experience. It's accessible as well. We'll innovate on Cadbury as part of that. Between Brookside and Cadbury, there's really good momentum. And then, like we talked about, we're building some accessible premium on our Hershey's brand, and we'll have new brands that we talk about later in this year for next year that create this great experience for consumers.

So Indulgent Premium, really targeted towards Gen Z consumers. So we feel really good about where we're going with our premium business and being a part of that. But I think there's, you know, it's a small part of the business today. So when you think about pure premium, it's about 5% of the total category. Now there's a lot of growth because there's a lot of experience inside premium, and that's drawing consumers to that. So we are definitely going to be in that space and leading in that space, you know, through some of our key brands that we have.

Thank you all. We look forward to catching up with many of you over the coming days and weeks.