As emerging markets' mid-class population is constantly increasing and the fast pace North American way of living is expanding, the interest for snack companies is growing. Hershey (HSY) is the leader in the chocolate candy market and Mondelez is not far behind. Known for their famous Cadbury, Lu, and Oreo brands, Mondelez is also active in the salty snack business through Nabisco, Triscuit, and Wheat Thins. Instead of fighting PEP with more chips, MDLZ has gone with the “replacement snack” business.
Hershey’s (same as MDLZ’s) business model is highly dependent on commodity prices such as cocoa and sugar fluctuating. For this reason, it is now time for HSY to enter the snack business with its own version of “replacement snacks.” So far, this expansion is working very well.
As Mondelez makes significant effort to focus on their brands, Hershey is expanding in a new market. Both companies are strong dividend paying stocks, but which one is the best pick now?
