Low oil hasn’t exactly been ideal for lots of folks.
But there is one unexpected industry that could benefit from lower oil: chocolate.
In a recent note on The Hershey Company, RBC Capital Markets’ David Palmer included a little tidbit on how lower gasoline prices could affect sales.
“We will be watching if lower gasoline prices in 2016 will increase trips to the convenience/gas channel (1/4th of US sales) to bolster chocolate sales,” he wrote.
The logic here is that convenience stores, which account for about 24% of Hershey chocolate sales in the US, typically sit adjacent to gas stations.
And since lower oil translates to lower gas prices, Americans can now afford to take more trips to the gas station and, by extension, more trips to convenience stores.
And if oil does help boost chocolate sales it would be great news for sweet-makers like Hershey’s, which have been dealing with various headwinds in the last year such as dollar strength, “ongoing struggles in China,” and Americans’ newfound preference for “healthier” snacks.
Now, although oil prices have been lower for over a year now, RBC did not explicitly show whether or not lower gas prices in 2015 helped boost chocolate sales.
They did, however, include a chart showing that Hershey’s chocolate sales at convenience stores in Q4 2015 — when oil again started to fall lower — fared well relative to other types of stores.
Convenience stores saw the smallest decrease in unit volume sales at 0.3%, compared with -4.2% in drug stores, -2.6% in food stores, and -2.1% in all measured channels.
Additionally, convenience stores saw the second-largest increase in dollar sales at 2.6%, above the 0.8% increase in food stores, and 2.3% for all measured channels.
In any case, at least one analyst thinks Americans might turn some of their gas savings into chocolate bars in 2016.