Hershey Recalls SoFit Items On Supplier Contamination Issues

The Hershey Company (NYSE:HSY) recently announced a voluntary recall of three SoFit products due to an expanded supplier recall of sunflower seeds.

Hershey’s supplier, SunOpta, issued a recall earlier this month on discovering that the sunflower seeds produced by it may be contaminated with Listeria monocytogenes infection.

As an act of caution, Hershey recalled SoFit snack products that included a sunflower seed item as well as an almond and a pumpkin seed item manufactured on the same equipment.

Hershey added the SoFit brand to its portfolio as part of its acquisition of the remaining 49% stake in an Indian company, Godrej Hershey Ltd., from Godrej Industries Ltd. and another small shareholder in 2012. The Hershey Company already held a 51% stake in Godrej Hershey at that time.

Hershey is shifting its focus to snacks items as it faces declining demand for its chocolate products. This year it has launched snack items like Reese’s Snack Mix and Hershey’s Snack Bites canister. The Apr 2016 acquisition of New York-based barkTHINS premium chocolate snacking brand will also build on the company’s better-for-you snacks portfolio.

In Feb 2015, Hershey also announced plans to use simpler ingredients like locally produced milk, roasted California almonds, cocoa beans and sugar in its chocolate products to cater to a growing number of health-conscious consumers.

In keeping with this trend, Hershey launched healthier versions of Hershey’s Kisses milk chocolates and Hershey’s milk chocolate bars made with simple ingredients and no artificial flavors during the 2015 holiday season. In 2016, it launched yogurt flavored Brookside branded fruit and nut bars made with simple and natural ingredients and a simpler version of Hershey’s classic syrup - Hershey’s Simply 5 Syrup – made with five simple ingredients.

Stocks to Consider

Hershey carries a Zacks Rank #3 (Hold). Some better-ranked food stocks are B&G Foods Inc. (NYSE:BGS) , Post Holdings, Inc. (NYSE:POST) and Lancaster Colony Corporation (NASDAQ:LANC) . All three stocks hold a Zacks Rank #1 (Strong Buy).