Hershey teams up with Costco to make a dream candy combo

The Hershey Company is on a streak with its new product launches, and this time, it's teaming up with the retail giant Costco to introduce two exciting new candy creations that form the ultimate dream combo.

Pairing Hershey, the largest chocolate manufacturer in the U.S., with Costco, one of the largest big-box retailers with a massive cult following, makes a powerful duo that's a no-brainer.

This partnership has resulted in an exciting announcement: the launch of the new Reese's Dipped Graham Bears and Hershey's S'mores Popcorn.

Reese's Dipped Graham Bears are bite-sized animal crackers coated in Reese's peanut butter and dipped in chocolate, which makes them crunchy on the inside and soft on the outside.
Hershey's S'mores Popcorn combines popcorn with chocolate and marshmallow drizzles, finished with sprinkled graham cracker pieces, creating a perfect sweet and salty mix.

Both new products are now available at Costco stores nationwide. However, the Reese's Dipped Graham Bears don't appear to be a Costco exclusive, as they have also been spotted at BJ's Wholesale Club.

Hershey partners with Costco to launch two new candy combinations.

Image source: Scott Olson/Getty Images

Hershey develops a new strategy to boost sales

These latest launches are part of Hershey's ongoing efforts to diversify its product portfolio amid rising cocoa costs and evolving consumer trends. The company has recently faced various challenges, including inflation, supply chain disturbances, and increased ingredient costs.

To adapt, Hershey (HSY) has strategically expanded beyond chocolate by incorporating other ingredients like peanut butter, caramel, and wafers into its products.

This shift not only helps the company meet consumer preferences but also reduces its reliance on cocoa, which has become increasingly costly due to global shortages and weather-related disruptions in West Africa, where around 70% of the world's cocoa comes from.

By embracing innovation and forming smart partnerships, Hershey positions itself for sustainable growth even in a challenging economic environment.

So far, this strategy has proven successful. In the second quarter of fiscal 2025, the company's net sales were up 26%, and its North America confectionery sector increased 32%.

Costco leverages brand partnerships to drive growth

Food has long been one of Costco's strongest product categories, and the company continues to strengthen its offerings in this area through exclusive partnerships with well-known brands like Hershey.

These collaborations help Costco (COST) stand out in the competitive retail sector by offering unique products that can't be found elsewhere while creating buzz for new product launches among its fans.

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This strategy has worked for the company and continues to deliver positive results. In the third quarter of fiscal 2025, Costco U.S. comparable sales increased nearly 8% year over year, with traffic up 5.5%.