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HERSHEY’S COMPANY PROFILE REPORT By: Michelle Van and Maria Gabriela


Contents Company background ............................................................................................................................. 5 Budget ..................................................................................................................................................... 5 Hershey’s Corporate Social Responsibility framework ........................................................................... 5 Hershey packaging .................................................................................................................................. 6 Target market ......................................................................................................................................... 6 U.S. Confectionary Industry .................................................................................................................... 7 U.S. Chocolate Market Share .................................................................................................................. 7 U.S. total confectionery market share .................................................................................................... 8


Company background Hershey’s was founded in 1984 in Pennsylvania by Milton S. Hershey and is one of the oldest chocolate companies in America. Today, Hershey’s is the largest chocolate manufacturer in the United States and a worldwide leader in chocolate and sugar confectionary, with iconic brands such as Hershey’s Kisses, Twizzlers, Reese’s, Kit Kat and Pieces. The company also offers premium and artisian chocolate products under brands such as Scharffen Berger and Dagoba through a wholly owned subsidiary known as Artisian Confections Company. They currently market, sell and distribute their products in roughly 70 countries. Hershey’s is also focused on growing their presence in key international markets such as China and Mexico, while continuing to build their competitive advantage in the United States and Canada. They operate throughout the world and employ roughly 14,000 people.

Budget Their current market cap stands at $US 16.07 billion, with revenues of more than $US 6 billion. Hershey reinvests roughly 7% of their net sales into advertising. The cost of sales for 2011 was $US 3,548,896,000 with selling, marketing and administrative costs totalling $US 1,477,750,000. Advertising costs for that year reached $US 414,171,000.

Hershey’s Corporate Social Responsibility framework Hershey’s CSR strategy is broadly defined as Listen, Learn and Act. Their CSR framework consists of engaging in fair and ethical business dealings, minimising their environmental impact while meeting functional requirements, fostering a desirable workplace and positively impacting society and local communities where they live and work. Their Corporate Social Responsibility is demonstrated in the Milton Hershey School, established in 1909 by the company’s founder and administered by the Hershey Trust Company, which provides quality education, housing and medical care at no cost to children in social and financial need. They also promote philanthropy, volunteerism and healthy living through programs such as Hershey’s Track and Field Games. Hershey’s selection in the Dow Jones Sustainability Index (DJSI) for 2012 reflects the company’s strong commitment to Corporate Social Responsibility and sustainable business practices. Furthermore, they are recognised as one of America’s top 50 community-minded companies.


Hershey packaging Hershey markets a variety of chocolate confections in bar and single-serve product forms. Generally, these products are packaged in flow wrap packaging consisting of multi-layer laminate material and delivered to retail customers in secondary shelf ready displays or packed in aluminium foil and placed inside a paper board secondary package. The products are distributed and stored at ambient temperatures without the benefit of climate control.

Target market In the beginning Hershey’s candies were targeted towards children, although this was a highly profitable market, it was relatively small and limited Hershey’s chances for growth. Hershey came up with its new products (e.g. Hershey Kisses), which helped increase sales in the adult market. Research shows that mothers determine the children’s early taste in candy, so by being the first to reach this target market and converting these mothers into loyal consumers the company is hoping they will introduce their children to Hershey’s candy. Secondary research also shows that adults eat more than 55% of all candies sold, making them an important target market for confectionery businesses.


U.S. Confectionary Industry

In 2010, sales for chocolate reached $US 11.5 billion dollars, while sales for sugar confectionery and chewing gum were $US 5.9 billion and $US 1.9 billion respectively.

U.S. Chocolate Market Share

Currently, Hershey’s dominates the American chocolate market at 42.9% with Mars Wrigley coming in second at 30.9%.


U.S. total confectionery market share

Hershey’s market share in the confectionery sector stands at 28.9%, second to Mars Wrigley who lead the market at 31.1%.

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