Printed Chocolate? Hershey Connects with Consumers Through Additive Manufacturing

When you consider 3D printing, what comes to mind is traditional manufacturing – automotive, aerospace, and the like. However, 3D printing is also beginning to emerge hold in non-traditional industries, including the food industry. Although it remains a niche product today, Research and Markets estimates that the 3D food printing market will reach ~$500M by 2023[1].

Hershey, the popular producer of chocolate, is one of the few large food players currently experimenting with 3D printed food. As a packaged food company, Hershey is dealing with some challenging trends in the food space. Consumer demand for personalized food continues to increase, driven by awareness of health impacts of certain ingredients. This leads to a desire for transparency in food. However, somewhat counterbalancing this is the constant need to deliver incremental convenience to customers. Some experts see 3D printed food as a way to address these trends, by reaching consumers directly and customizing products exactly to their unique taste. For example, imagine a future in which a machine allows customers to print customized Hershey treats in their own home. According to Jeff Mundt, senior marketing manager of technology at Hershey’s innovation center, “If we don’t get the edge and lead the way to edible food printing, someone else will do it for us. And we’re all about innovation.”[2]

In the short term, Hershey is primarily in experimentation mode, using 3D printing to “wow” consumers. In early 2014, Hershey partnered with 3D printing leader 3D Systems to develop a “chocolate printer”. At the time, William Papa, VP of and Chief R&D Officer of Hershey, stated, “We believe that innovation is key to delivering relevant, compelling consumer experiences with our iconic brands…we embrace new technologies as a way to keep moving our timeless confectionery treats into the future.”[3] During this experimental phase, Hershey is deriving value from 3D printing as a marketing novelty, leveraging the capability to connect with consumers in new ways. For example, at Hershey’s Chocolate World locations, consumers can make chocolate bars with custom designs, including their own likeness.2 Additionally, Hershey has used 3D printing capability to take advantage of viral marketing moments – for example, when a couple went viral on Twitter over a dispute on how to eat a Kit Kat, Hershey printed a Kit Kat ring box to be used in the proposal.[4] Again according to Mundt, “Our approach is launch to learn, rather than learn to launch. Put something in front of people and see how they respond to it.”2

Moving forward, Hershey is implementing a few initiatives to continue their effort to commercialize this technology. At the end of 2017, Hershey partnered with the Culinary Institute of America (CIA) to launch a beta program for the ChefJet Pro, a 3D chocolate printer designed to give professional chefs the ability to create innovative and creative designs.[5] Further out, the Hersey team is also discussing exploring distributed manufacturing capabilities in areas without Hershey manufacturing facilities, as well as non-chocolate food printing.2

While Hershey is progressing its technology incrementally in this space, I would like to see them do more. Currently, they are using the technology as a novelty, with some small investment in commercializing it in the commercial space. However, if they are committed to innovating in their business, there are many different avenues they could invest behind. For example, while a 3D chocolate printer for the home would be expensive in its early days, it could be the type of product that generates outsized marketing “buzz”. Further, it would provide live consumer testing that Hershey could use to improve the technology and further connect with consumers. Additionally, Hershey could do more to use this manufacturing process internally. For example, using 3D printing in its existing factories and allowing customers to “live submit” customized orders to be printed, e.g. for birthdays. While Hershey has publicly committed to advancing this technology in the food industry, they are making only incremental progress.

Finally, there are two questions I would pose to those thinking about this opportunity at Hershey. First, what else could Hershey do to advance their use of this technology in a cost-effective manner? And secondly, in the end state, who in the supply chain will capture the value of the 3D printed food industry? Is it the manufacturer of the machines, the manufacturer of the inputs, the creator of the designs, or someone else? Related, how can Hershey position itself to capture value in this end state? I think these are questions that Hershey management should be more proactive in answering.

 

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[1] TJ McCue, “3D Food Printing May Provide Way to Feed the World”, Forbes, Oct. 30 2018, https://www.forbes.com/sites/tjmccue/2018/10/30/3d-food-printing-may-provide-way-to-feed-the-world/#29a3301b5817, accessed 11/9/18.

[2] Beth Snyder Bulik, “Edible 3-D Food Printing Becomes a Reality at Hershey”, AdAge, Jan. 28 2015, https://adage.com/article/news/edible-3-d-food-printing-a-reality-hershey/296812/, accessed 11/9/18.

[3] 3D Systems, “3D Systems and Hershey Team Up to Deliver 3D Printed Edibles”, January 16 2014, https://www.3dsystems.com/press-releases/3d-systems-and-hershey-team-deliver-3d-printed-edibles-0, accessed 11/9/18.

[4] John Bonazzo, “This Guy Can’t Eat Kit Kats Right – Hershey Still Helped Him with a Marriage Proposal”, Observer, July 5 2018, https://observer.com/2018/07/hershey-kit-kat-marriage-proposal-twitter-haley-byrd-evan-wilt/, accessed 11/9/18.

[5] Jenny Eagle, “Hershey Continues to Explore the Possibilities of 3D Printing”, Confectionary News, Dec. 4 2017, https://www.confectionerynews.com/Article/2017/12/04/Hershey-continues-to-explore-the-possibilities-of-3D-printing, accessed 11/9/18.

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7 thoughts on “Printed Chocolate? Hershey Connects with Consumers Through Additive Manufacturing

  1. I’d like to respond to the first question. I think that given that Hershey uses 3-D printing of chocolate primarily as a marketing tool, that the best way they could utilize this technology is by offering it to large corporate clients for conferences, extravagant weddings for live printed gifts, and other venues where the performance of creating customized chocolate is in and of itself an form of entertainment. The Hershey-branded 3-D chocolate printer would provide the same kind of entertainment as a photo booth, allowing guests to take away an edible keepsake. I don’t believe that Hershey is truly at the forefront of 3-D printing, but this application is a nice marketing tool.

  2. This was a good read in that it both spoke to an inherently interesting topic and injected some important business perspective (e.g., projected market size). I agree that Hershey could be doing more. You mention health awareness – one interesting avenue would be to use 3D printing to make the company’s products healthier. For instance, instead of solid chocolate, a printed bar could have air pockets that lead to a reduction in calories. While there’s been a lot of talk around using 3D printing for health foods (e.g., https://www.chicagotribune.com/bluesky/hub/ct-us-chamber-3d-printing-healthier-eating-bsi-hub-20160128-story.html), less unhealthy sweets strikes me as a more realistic starting point.

  3. Coming from the F&B industry, I found this essay very engaging.

    I will venture to say it is the retailer who will provide the 3D printing services (and therefore the entity that will benefit) in the future. From a logistics standpoint it seems that this can be the only answer.

    Wholeseller/manufacturer: it seems unlikely consumers will reach out to individual makers of each and everyone of their favorite lines of products.

    Consumer: it is logistically difficult for consumers to have all the printing ingredients necessary to create every food/sweet they want.

    In this sense the responsibility of creating the 3D printing will fall under the retailer, who will sell the customization services to the consumer on their stores, or online. Afterwards delivering the end-product.

  4. Great article on how 3d printing can be effectively used to enhance the food business.

    Addressing your question about who would capture the benefits created by the 3d printing business, I think that the sellers of the inputs (in this case Hershey´s) will take most of the profits. Take the example of Lexmark’s. This company sells printers (hardward) and supplies. The commoditization of the printing hardware in the last decade pushed prices down, therefore reducing margins. Therefore, companies such as Lexmark’s are focusing on making profits by selling the inputs (cartridges). [1] I think something similar will happen in the chocolate industry. Companies such as Hershey´s will sell the hardware (3d printers) at the lowest possible price to attract many customers, and once they develop a significant customer base, they will sell multiple inputs at a profitable price.

    To sum up, I appreciated your article and I think you addressed very important issues in relation to the challenges of using 3d printing in the food business.

    [1] Weak Demand For Printer Supplies And Hardware Will Continue To Hinder Lexmark’s Printer Business, Forbes, December 10th 2015, accessed November 2018, https://www.forbes.com/sites/greatspeculations/2015/12/10/weak-demand-for-printer-supplies-and-hardware-will-continue-to-hinder-lexmarks-printer-business/#5eb0203f7721

  5. It’s amazing that this could really be a $500M business in 5 years. One more (novelty) use case that might be possible using this technology is “branded food.” I’m imagining a pancake that has Hershey’s name printed into it in chocolate ink. They could extend that to other brands too. Maybe food is the next advertising medium?

  6. That’s a great article on one of the paths a future of food industry can take. While sharing author’s optimism about the possibilities of 3D printing in food production I’d like to argue that 3D printed food is not likely to become an overall trend in nearest future. The technology itself is clearly exciting, however in order to use this efficiently the company has to use it in production of complex forms (as all the easy ones are cheaper to just mold) which will in turn put additional costs on the transportation and packaging aimed at preventing beautiful chocolate (or any other food) models from collapsing.

  7. Great read on a company we are all familiar with.

    I also thought that the first best market for this technology would be corporate clients. When companies host events, either for themselves or for open public, they have the money and the will to impress its participants. Creating memorable chocolates with customized design could be a very productive business, which will allow Hershey’s and 3D Systems to both gain experience through the business with corporate clients.

    As for your second question, I imagined that, one day, this 3D printing technology will become like any other home appliances (oven, refrigerator, microwave, etc.) In this state, it would most likely be the retail users of this product (such as chefs) who will hold the power with their unique and non-replicable skills. However, I believe the the product still has a long way to go, so it will not be an issue for 3D printing tech company for many, many years ahead.

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