DETAILED STUDYOF HERSHEYS AND COMPARITIVE ANALYSIS WITH COMPETITORS

PROJECT REPORT
SUBMITTED TO PANJAB UNIVERSITY,CHANDIGARH IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

lm(2009-2012)

DECLARATION
Hereby declare that the project report entitled DETAILED STUDY OF HERSHEYS AND COMPARITIVE ANALYSIS WITH COMPETITORS submitted for the degree of Bachelor of Business Administration, is my original work and the project report has not formed the basis for the award of any diploma, degree, associate ship, fellowship or similar other titles. It has not been submitted to any other university or institution for the award of any degree or diploma.

Place: Chandigarh

CERTIFICATE

This is to certify that Raj has completed her project report on the topic of DETAILED STUDY OF HERSHEYS AND COMPARATIVE ANALYSIS WITH COMPETITORS under the supervision of Mr.rajesh faculty member of Post Graduate Government College Sector-11.

To best of my knowledge the report is original and has not been copied or submitted anywhere else. It is an independent work done by her.

ACKNOWLEDGEMENT

Detailed analysis is an excellent tool for learning and exploration. No classroom routine can substitute which is possible while working in real situations. Application of theoretical knowledge to practical situations is the bonanzas of this study.Without a proper combination of inspection and perspiration, its not easy to achieve anything. There is always a sense of gratitude, which we express to others for the help and the needy services they render during the different phases of the lives. I too would like to do it as I really wish to express my gratitude toward all those who have been helpful to me directly or indirectly during the development of this project.

I would like to thank my professor Mr. rajeshwho was always there to help and guide me when I needed help. Her perceptive criticism kept me working to make this project more full proof. I am thankful to her for encouraging and valuable support. Working under her was an extremely knowledgeable and enriching experience for me. I am very thankful to her for all the value addition and enhancement done to me. No words can adequately express my overriding debt of gratitude to my parents whose support helps me in all the way. Above all I shall thank my friends who
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constantly encouraged and blessed me so as to enable me to do this work successfully.

TABLE OF CONTENTS
Chapter Number I II III Chapter name Introduction Company Overview History & Detailed background of Hersheys Hersheys Products Partnerships
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Page Number 1-16 17 18-30

IV V VI

31-46 47-51

Market Competition &Comparision Financial Analysis Suggestions & Recommendations Conclusion Bibliography Annexure 68-76 77-79

VII VIII

IX X XI

80-81 82 83-87

Introduction

CHOCOLATE INDUSTRY
The chocolate industry is a steadily growing, $50 billion-a-year worldwide business centered on the sale and consumption of chocolate. This industry is prevalent on five out of seven continents. Big Chocolate, as it is also called, is essentially an oligopoly between major international chocolate companies in Europe and the U.S. These U.S. companies such as Mars and Hersheys alone generate $13 billion a year in chocolate sales and account for two thirds of U.S. manufacturers. However, Europe accounts for 45% of the world's chocolate revenue. Many chocolate manufacturers have created products from chocolate bars to fudge, hoping to attract more consumers with each creation. Both The Hershey Company and Mars have become the largest manufacturers in the world. Other significant players include Cadbury, Nestl, Kraft Foods and Lindt. The Hershey Company, known for their Hershey bar, Hershey's kisses and Reese's Peanut Butter Cups, is the largest chocolate manufacturer in North America. Mars, Incorporated, one of the largest privately owned U.S. corporations, is a worldwide
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manufacturer of confectionery and other food products with US$21 billion in annual sales in 2006. Mars is known for Mars Bar, as well as other confectionery such as Milky Way, M&M's, Twix, Skittles and Snickers. Food conglomerates Nestl SA and Kraft Foods both have chocolate brands. Nestl acquired Rowntree's in 1988 and now market chocolates under their own brand, including Smarties and Kit Kat; Kraft Foods through its 1990 acquisition of Jacobs Suchard, now own Milka and Suchard. In February 2010, Kraft also acquired British-based Cadbury plc, the world's largest confectionery manufacturer. Cadbury is well known for its Dairy Milk range and Creme Egg; Fry's, Trebor Basset, the fair-trade brand Green & Black's also belong to the group.

Making Chocolate
Welcome to Hershey, Pennsylvania, home of the worlds largest chocolate factory. This is where HERSHEY makes its famous chocolate, b u t i t really starts in the tropics.

Born i n the Jungle All around the world, from Brazil to Indonesia to the I v o r y Coast and Ghana, deep in the tropical jungle there grows a very special treethe cacao tree.

Cacao trees grow melon-like fruit, which is harvested by hand. Inside each pod are about 20-40 seeds, o r cocoa beans.

After the beans are removed from the pods, they are placed in la rg e heaps or piles. This is called fermentation, and takes about a week. During this time, the shells harden, the beans darken, and the rich cocoa flavor develops. After drying, the beans are ready for transpo r t to the chocolate factory.

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Liquid Chocolate Railroad cars carry the cocoa beans from the docks to the chocolate factory where they are cleaned and stored. Cocoa beans from different countries each have a A special hulling machine then takes the dr y , roasted cocoa beans and distinct flavor. After arriving a t the factory, the separates the shell from the insideo f the bean - called the nib. This is the beans are stored by country o f origin until the y are par t o f the bean actually used to make chocolate. blended to give them that special Hershey taste. The nibs now are ready for milling. Milling is a grinding process which turns Cocoa beans are roasted in large, revolving the nibs into liquid called chocolate liquor - a smooth, dark stream of pure roasters at very high temperatures. chocolate flavor which, by the way, contains no alcohol. Now it is ready for the resto f the ingredients!

Mixingi t up The main ingredients in chocolate are the chocolate liquor, cocoa butter, suga r and milk.

Hershey uses fresh, whole milk to make its milk chocolate. Its been that way since Milton Hershey developed the recipe in 1900. Tanker trucks bring the fresh milk to the factory everyday where i t is
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tested, pasteurized, and then mixed with sugar. The whole milk-suga r mixture is slowly dried until i t turns into a thick, taffy-like material.

A t the heart o f the chocolate factor is the central blending operation Where, the chocolate liquor is combined with the milk and sugar. This new mixture is dried into a coarse, brown powder called chocolate crumb. Perfecting the chocolate

The chocolate crumb powder is used to make milk chocolate. Hershey adds cocoa b u t t e r to the crumb which brings o u t the rich taste and creamy texture o f the chocolate. The crumb travels through special steel rollers which grind and refine the mixture, making i t smoother. The crumb becomes a thick liquid called chocolate paste. The paste is poured into hu ge vats called conches. Once inside the conches, lar ge granite rollers smooth ou t the
g

r i t typarticles from the crumb. This process can take

anywhere from 24 to 72 hours to com plete.

Now the chocolate paste has the smooth, familiar look o f milk chocolate and its ready to be made into our favorite

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Chocolate Bars and HERSHEY S KISSES Chocolates Most chocolate bars are made by pouring the liquid chocolate paste into moulds. The molding machines can fill more than 1,000 moulds per minute with delicious HERSHEYs chocolate. The filled moulds then take a bumpy, vibrating ride to remove air bubbles and allow the chocolate to settle evenly. Finally, they wind their way through a long cooling tunnel where the liquid chocolate is gently chilled into a solid candy bar.

Now its ready to wrap fresh, delicious, HERSHEYS chocolate.

While a lot of HERSHEYs chocolate products are poured into moulds, HERSHEYs KISSES Chocolates are made a little differently. Special machines drop a precise amount o f chocolate onto a moving steel belt and then quickly cool it to form the famous HERSHEYS KISS shape. Hershey makes more than 80 million Kiss-shaped products every day a t its chocolate factories in Hershey and California.

Fresh from the Factory

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As Americas leading chocolate manufacturer, Hershey produces more than a billion pounds of chocolate products each year.

A sophisticated, computerized distribution system makes sure that fresh products arrive at retail outlets across the country. Although the name Hershey means chocolate to most people, Hershey produces a l o t o f other famous products like Reese 's peanut b u t t e r cups, York peppermint patties, Mounds and Almond Joy, twizzlers, Payday, and Jolly Rancher. They are all pa r t o f the growing family o f chocolate and candy products produced and distributed b y Hershey. Thanks for visiting the worlds largest chocolate factory. Comevisit usi f you can here in Chocolate Town USA. So long

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OBJECTIVES OF THE STUDY

This project is based on the detailed analysis of Hersheys: Its growth and expansion Objectives of the study are: Missions, visions, values, goals History: significant developments, events and initiatives that shaped the company Products & services: business description, business segments Financials: financial statements, ratio analysis, company vs. industry Market performance: prices, charts, analyst estimates/forecasts Competitive analysis: SWOT analysis, peer comparison, industry/regulatory factors Industry growth forecast: historical growth, growth drivers (e.g., changes in demographic profiles and growth of complementary products) To measure what candy brands the target market eats most frequently To identify the target markets favorite brand(s) To assess the target markets attitudes/beliefs about candy in general and chocolate candy in particular.
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SCOPE OF THE STUDY

This finding aid is not intended to include all sources of company information on all industries, in all places, or by all publishers - there are far more possible sources than could be included in a single guide. Rather, this guide is designed to give someone searching for company information some ideas and strategies for finding this type of information. When doing company research there are many, many sources to use. Depending on the company - its size, industry, location - some sources will be good while others will not. Also, the comparison with the existing competition in the industry has been analyzed. Researching them tends to be a more creative exercise. Those companies in industries that are dominated by private players or those in areas that are more suspicious of their competitors, tend keep their information more closely held. The Scope of Company analysis is limited to one company Hersheys, to know itsperformance, growth, expansion skills, product description, future plans and the standing of the company in the market. The scope of my study is worldwide and is not limited to one particular area but, refers to many countries where Hersheys is exported and manufactured.
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Company Overview
The Hershey Company was incorporated under the laws of the State of Delaware on October 24, 1927 as a successor to a business founded in 1894 by Milton S. Hershey. In this report, the terms Company, we, us, or the mean The Hershey Company and its wholly-owned subsidiaries and entities in which it has a controlling financial interest, unless the context indicates otherwise. We are the largest producer of quality chocolate in North America and a global leader in chocolate and sugar confectionery. The principal product groups include chocolate and confectionery products; snack products; gum and mint refreshment products; and pantry items, such as baking ingredients, toppings and beverages.

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History and detailed background of Hersheys

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History of Hersheys

It all started with a decision. Hersheys company originated with candy-manufacturer Milton Hersheys decision in 1894 to produce sweet chocolate as a coating for his caramels. Located in Lancaster, Pennsylvania, the new enterprise was named the Hershey Chocolate Company. In 1900, the company began producing milk chocolate in bars, wafers and other shapes. A company on the move. The immediate success of Hersheys low-cost, high-quality milk chocolate soon caused the companys owner to consider increasing his production facilities. He decided to build a new chocolate factory amid the gently rolling farmland of southcentral Pennsylvania in Derry Township, where he had been born. Close to the ports of New York and Philadelphia that supplied the imported sugar and cocoa beans needed, surrounded by dairy farms that provided the milk required, and with a local labor supply of honest, hardworking people, the location was perfect. By the summer of 1905, the new factory was turning out delicious milk chocolate.

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A KISS for the whole world. Looking to expand its product line, the company in 1907 began producing a flatbottomed, conical milk chocolate candy that Mr. Hershey decided to name HERSHEYS KISSES Chocolates. At first, they were individually wrapped in little squares of silver foil, but in 1921 machine wrapping was introduced. That technology was also used to add the familiar plume at the top to signify to consumers that this was a genuine HERSHEYS KISSES Chocolate. In 1924, the company even had it trademarked. HERSHEYS chocolate goes to war. With the outbreak of World War II, the Hershey Chocolate Corp. (which had provided milk chocolate bars to American doughboys in the first war) was already geared up to start producing a survival ration bar for military use. By the end of the war, more than a billion Ration D bars had been produced and the company had earned no less than five Army-Navy E Production Awards for its exceptional contributions to the war effort. In fact, the companys machine shop even turned out parts for the Navys antiaircraft guns.

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Growing up and branching out. The following decades would see the company - renamed Hershey Foods Corporation in 1968 - expanding its confectionery product lines, acquiring related companies and even diversifying into other food products. Among the many acquisitions were San Giorgio Macaroni and Delmonico Foods (1966); manufacturing and marketing rights to English candy company RowntreeMacKintoshs products (1970); Y&S Candies, makers of TWIZZLERS licorice (1977); Dietrich Corp.s confectionery operations (1986); Peter Paul/Cadburys U.S. confectionery operations (1988); and Ronzoni Foods (1990).

The Hershey Company enters a new century. Today, The Hershey Company is the leading North American manufacturer of chocolate and non-chocolate confectionery and grocery products. As the new millennium begins, The Hershey Company continues to introduce new products frequently and take advantage of growth opportunities through acquisitions. HERSHEYS products are known and enjoyed the world over. In fact, the company exports to over 90 countries. With approximately 13,700 employees and

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net sales in excess of $4 billion. The Hershey Company remains committedto the vision and values of the man who started it all so many years ago

GETTING STARTED
A New Company: 1894 In the beginning, the Hershey Chocolate Company was simply a wholly owned subsidiary of Milton Hersheys Lancaster Caramel Company. Using chocolatemaking equipment purchased at the 1893 Columbian Exposition in Chicago, the company produced baking chocolate, cocoa and sweet chocolate coatings for the parent companys caramels. But things changed with the hiring of William Murrie to sell the excess product to other confectioners. Murrie was so successful a salesman that the Hershey Chocolate Company quickly turned into a viable concern on its own. Milton Hershey became even more convinced that his future in the candy business lay in chocolate, not caramels.

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Sweet Chocolate Novelties: 1895 1909 By 1895, the Hershey Chocolate Company was manufacturing 114 different items in all sorts of sizes and shapes. Many were flavored with vanilla and given luxurious-sounding names like LeRoi de Chocolate, Petit Bouquets and Chocolate Croquettes. Chocolate segars and cigarettes were also quite popular. The Baby in the Bean: 1898 On August 1, 1898, the company adopted a very distinctive symbol for its trademark. The small child in a cocoa bean pod appeared on cans of HERSHEYS COCOA up until 1936, when it was finally replaced by the block lettering familiar today. The Baby in the Bean went through many incarnations, sometimes holding a cup of cocoa, sometimes a chocolate bar. Even the childs hair and facial expression underwent changes over the years. The logo symbol was finally retired in 1968, when the company was reorganized as Hershey Foods Corporation. Finding the Formula: 1895 1904 While his company was successful enough selling sweet chocolate products, Milton Hershey was certain the real market lay in milk chocolate. The problem

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was in developing a formula for manufacturing it cheaply and efficiently, while still maintaining a high level of quality. Hershey built a milk-processing plant on the family farm in Derry Township in 1896 and spent the next several years developing a viable formulation for milk chocolate. Dressed in hip boots, Hershey worked day and night, going back and forth between the condensing room and the creamery, rarely even stopping for meals. Finally, in 1899, he cracked the recipe and became the first American to manufacture milk chocolate.

EXPANDING AND INNOVATING

Stepping Stones Many Hershey products that are familiar today were originally produced for the confectionary trade and were later reformulated for consumers. HERSHEYS powdered cocoa, for example, has been manufactured continuously since 1894. Also, Hershey was the first to sell chocolate syrup for home use beginning in 1926. While Sprigs, the forerunner of HERSHEYS chocolate chips, was introduced in 1928. A Kiss and Tell Story

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Of these, the very first addition to the HERSHEYS product line of milk chocolate confections was HERSHEYS KISSES Chocolates way back in 1907. Originally, each one was hand-wrapped in a square of silver foil, but in 1921 machine wrapping was introduced, along with the addition of the unique plume which marked it as a genuine HERSHEYS KISSES Chocolate.

Sweet Inventions The KRACKEL bar was introduced on September 14, 1938. During its first few years, the formula for the confection changed several times, with almonds, and then peanuts, being included along with crisped rice in milk chocolate. Finally, the nuts were eliminated altogether in 1943, leaving the crispy milk chocolate recipe enjoyed by millions ever since.

GROWING GLOBALLY
Up, Up and Away Despite Milton Hersheys death in 1945, Hershey Chocolate Corporation retained the entrepreneurial values of innovation and risk-taking imprinted on it by its founder. Throughout the post-World War II period, a host of new products were

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introduced, many of which were successful, some of which were discontinued after only a few years. By the 1960s, the company was ready to enlarge the scope of its operations. One example of this new approach was the purchase in 1963 of the H.B. Reese Candy Co. Another was the companys diversification into pasta manufacturing with the acquisition of San Giorgio Macaroni, Inc. and Delmonico Foods, Inc. The company also expanded geographically, building new chocolate plants in Ontario, Canada and Oakdale, California.

Hershey Goes International

In addition to being the leading producer of chocolate and non-chocolate confectionary and other grocery products in North America, The Hershey Company also carries on a significant international presence with operations in more than 90 different countries. Hershey's International division exports HERSHEYS chocolate and grocery products worldwide and maintains licensing agreements with partners in nations such as South Korea, Japan, the Philippines and Taiwan. We dont believe Milton Hershey would have been at all surprised to learn that his HERSHEYS KISSES Chocolates are especially popular in Japan.

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Top of the Charts Through unceasing technological modernization, strategically astute acquisitions and continued new product development, The Hershey Company grew spectacularly in the last 30 years of the 20th century. From $334 million in 1969, the companys net sales soared to $4.4 billion in 2004. The Hershey Company is the leading North American manufacturer of quality chocolate and non-chocolate confectionery and chocolate-related grocery products. The company also is a leader in the gum and mint category.

Detailed specifications
After completing an apprenticeship to a confectioner in 1873, Milton Snavely Hershey founded a candy shop in Philadelphia, which failed six years later. After trying unsuccessfully to manufacture candy in New York, Hershey returned to Pennsylvania, where he founded the Lancaster Caramel Company, whose use of fresh milk in caramels proved successful. In 1900, Hershey sold his caramel company for $1,000,000 (US$24,613,670.55 in today's currency) and began to concentrate on chocolate manufacturing.

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While his company was successfully selling sweet chocolate products, Milton Hershey knew that a fortune lay in making and selling milk chocolate products. Milton built a milk-processing plant in the year 1896, so he could create and refine a recipe for milk chocolate candies. In 1899, three years later, he developed the Hershey process.

7,000 square feet (700 m2) Hershey Store located on the Falls Avenue Entertainment Complex in Niagara Falls, Canada

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Hershey's Times Square Store, Times Square, New York City

Hershey's Syrup, circa 1950s In 1907, Hershey introduced a new candy, small flat-bottomed conical-shaped pieces of chocolate that he named "Hershey's Kiss". Initially they were individually wrapped by hand in squares of foil, and the introduction of machine wrapping in 1921 simplified the process while adding the small paper ribbon to the
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top of the package to indicate that it was a genuine Hershey product. The product was trademarked three years later and went on to become one of the most successful and well-known products ever produced by the company.

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Hersheys Products

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Hershey's produces a large variety of chocolate based products. Hershey is also licensed to produce Cadbury products.

Hershey's chocolate bars

Hershey's Milk Chocolate is commonly thought of as "plain" or "normal" Hershey's chocolate.

Hersey's Milk Chocolate with Almonds standard Hershey's chocolate with almonds mixed in.

Hershey's Special Dark, a mildly bittersweet chocolate, contains less sugar than other forms. It contains 45% cacao solids.

Hershey's Special Dark with Almonds Hershey's Extra Creamy Chocolate and Caramel Hershey's Cookies 'n' Creme, a block of white chocolate with small pieces of cookie in it.

Hershey's Symphony

Hershey's Symphony contains less sugar and is creamier than "normal" Hershey's chocolate. The ingredients lists of it and its normal counterpart are
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identical; in America it is mandated that ingredients only be listed in their order of total makeup. Quantities are not listed, so one can not know for sure how greatly the proportions differ in Hershey's Symphony. Hershey recently reduced the size of the Symphony bar from 8 oz. to 6.8 oz. and added the words "Giant Bar" to the wrapper.

Hershey's Symphony with Almonds

Hershey's Extra Dark

Hershey's Pure Dark Chocolate is a darker chocolate product under the "Extra Dark" name. Whereas "Special Dark" is 45% cacao solids, "Extra Dark" is 60%.

Hershey's Pure Dark Chocolate Cranberries, Blueberries, & Almonds Hershey's Pure Dark Chocolate with Pomegranate

Almond Joy

Almond Joy Bar, a milk chocolate enrobed bar containing a coconut based mixture and almonds

Almond Joy King Sized Bar Almond Joy Miniatures

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Almond Joy Snack Size Bars Almond Joy 8-Pack Almond Joy Eggs, a small bite-sized candy version of the Almond Joy bar introduced in 2010

Mounds

Mounds Bar candy bars are dark chocolate enrobed coconut base mixture Mounds King Sized Bar Mounds Miniatures Mounds Snack Size Bars Mounds 8-Pack

100 Calorie Bar

York Peppermint Wafer Bars Reese's Peanut Butter Wafer Bars Hershey's Pretzel Bars Hershey's Special Dark Chocolate Bars Hershey's Crisp Wafer Bars Hershey's Whipped Vanilla Bars
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Hershey's Bliss

Hershey's Bliss Milk Chocolate, bite sized chocolates in a square shape and wrapped in foil, advertised as creamy and indulgent.

Hershey's Bliss Milk Chocolate with a Melt Away Center Hershey's Bliss Dark Chocolate

Hershey's Drops Circular-shaped chocolate candies based on 2 Hershey chocolate bars.

Hershey's Drops Milk Chocolate Hershey's Drops Cookies and Cream

Hershey's Miniatures A new collection, Nut Lovers, was introduced in 2004 and features both 4 kinds of chocolate and 4 kinds of nuts. Hershey's has also introduced Limited Edition varieties, including a holiday Mint Miniatures Collection.
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Assorted, a bag of miniature Hershey's bars in Hershey's Milk Chocolate, Krackel (a chocolate bar containing crisped rice.), Hershey's Special Dark and Mr. Goodbar varieties. Devised in 1939 and unchanged since.

Cookies 'n' Chocolate, a bag of miniature Hershey's bars in Hershey's Milk Chocolate and Cookies 'n' Creme varieties

Special Dark Miniatures, a bag of miniature Hershey's bars in Hershey's Special Dark varieties

Hershey's Pot of Gold

Hershey's Pot of Gold, premium boxed chocolates in a variety of assortments: Almond Caramel Clusters, Caramel Assortment, Chocolate Assortment, Crme Assortment, Mint Assortment, Nut Assortment, Pecan Caramel Clusters, Premium Assortment, Sugar Free and Truffle Assortment

Kit Kat Wafer Bar Sold only in the United States under license from Nestl; essentially chocolatecovered wafer bars.

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Kit Kat Milk Chocolate Kit Kat Extra Crisp Kit Kat White Kit Kat Snack Size Kit Kat Minis Kit Kat Seasonal Bunny Ears Kit Kat Seasonal Best Friend Heart

Hershey's Nuggets chocolates

Milk Chocolate Extra Creamy Milk Chocolate with Toffee and Almonds Milk Chocolate and Almonds Double Chocolate Special Dark Chocolate with Almonds

Hershey's Kisses brand chocolates Hershey's Kisses brand chocolates ("kisses") are pieces of chocolate shaped like very large chocolate chips.
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Milk Chocolate, a kiss containing milk chocolate Filled with Caramel, a kiss with caramel filling Hugs, a kiss containing a twist of white chocolate and milk chocolate Milk Chocolate with Almonds, a kiss containing almond pieces Special Dark, a dark chocolate kiss Cherry Cordial, a kiss with cherry flavored filling

Reese's Peanut Butter Cups Possibly one of Hershey's best-known products due to long-running massive advertising campaigns.

Peanut Butter and Milk Chocolate Peanut Butter and White Chocolate Crispy Crunches Reese's Select Clusters Peanut Butter and Milk Chocolate Big Cup, a larger Peanut Butter Cup with milk chocolate

Peanut Butter and White Chocolate Big Cup, a larger Peanut Butter Cup with white chocolate

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Brownie, a brownie containing peanut butter and chocolate Egg, Peanut Butter Cup in the shape of an egg Heart, Peanut Butter Cup in the shape of a heart Miniatures, A variable of the classic Reese's Peanut Butter Cup Pumpkin, Peanut Butter Cup in the shape of a pumpkin Tree, Peanut Butter Cup in the shape of a tree Dark Chocolate, A Reese's Peanut Butter using Hershey's Dark Chocolate

Pieces

Reese's Pieces Almond Joy Pieces Hershey's Special Dark Pieces York Pieces

Whoppers

Milk Chocolate, chocolate covered malted milk balls Peanut Butter Strawberry
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York Peppermint Pattie

York Peppermint Pattie, a patty of peppermint flavored filling enrobed with dark chocolate.

York Miniatures York King Size Patties York 8-pack York Valentines York Snowflakes

Others

The Whatchamacallit Bar is a peanut-flavored crisp with a layer of caramel and a milk chocolate coating.

Skor is a candy bar containing toffee. Rolo consists of chocolate-covered caramels. Also made and sold in the US by Hershey under license by Nestl.

The Heath Bar is a slab of toffee enrobed with chocolate. 5th Avenue is a candy bar which contains a peanut-based mixture.
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Milk Duds are small bits of caramel enrobed in milk chocolate. Milk Duds are commonly sold in American movie theaters as a snack.

Mr. Goodbar is a chocolate bar containing peanuts. Take 5, known as Max 5 in Canada, is a candy bar with pretzels, caramel, peanuts, peanut butter, and chocolate.

Reese's Fast Break, known as Hershey Sidekick in Canada, consists of creamy peanut butter and nougat covered in milk chocolate.

Reese's NutRageous consists of creamy peanut butter, caramel and roasted peanuts covered in milk chocolate.

Reese's Sticks made with Chocolate and Peanut Butterare peanut butter filled wafers covered in milk chocolate. They are sold in packages of two sticks each.

Hershey Canada

Cherry Blossom is an individually packaged, 45g chocolate covered maraschino cherry and syrup. The chocolate mixture has coconut and roasted peanut pieces incorporated into it.

Glosette(s), a Canada exclusive product consisting of chocolate covered raisins, peanuts or almonds.
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Oh Henry!, a candy bar containing peanuts, caramel, and fudge enrobed in chocolate, currently made in the United States by Nestl.

Cadbury Chocolates Cadbury products are sold by Hershey's in the United States and Kraft Foods in other parts of the world.

Cadbury Creme Egg, is a chocolate egg with creme in it, usually sold around Easter.

Cadbury Caramel Egg, is a variety of Cadbury Creme Egg filled with caramel.

Cadbury Mini Eggs candy, bite-sized milk chocolate eggs coated in a hard, vanilla flavored candy shell.

Cadbury Caramello candy bar milk chocolate squares with creamy caramel. Cadbury Dairy Milk Chocolate Bar, plain milk chocolate. Cadbury Fruit & Nut Chocolate Bar, milk chocolate with assorted fruits and nuts.

Cadbury Royal Dark Chocolate Bar, plain dark chocolate. Cadbury Roast Almond Chocolate Bar, milk chocolate with almonds.

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Non-Chocolate

Breath Saversbreath mints. Bubble Yum bubble gum brand. Ice Breakers chewing gum and mints. Jolly Rancher hard fruit candy, lollipops, and flavored soda. Koolerz chewing gum, with Xylitol and regular. PayDay candy bar, which contains peanuts and caramel but no chocolate. ZAGNUT candy bar, consisting of toasted coconut and peanut butter. Zero candy bar, a combination of caramel, peanut and almond nougat covered in white fudge.

Hershey's cookies and cream is a bar made of vegetable oil-based white confection with added chocolate wafer bits (similar to Oreo cookies).

Other

CareFree sugarless gum. CareFreeKoolerz mint based gum in various flavors made with Xylitol. Chipits, chocolate chips, comes in: Milk Chocolate, Dark Chocolate, SemiSweet Chocolate, White Chocolate, Butterscotch, Reese's, and Skor.

Good & Plenty, white and purplish-red pill shaped licorice candies. They are chewy, similar to Mike And Ike candy.
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Hershey's Brownies and Reese's Brownies, brownies containing Hershey's chocolate chips or Reese's peanut butter chips with icing on top.

Hershey's Cookies, a chocolate cookie with toppings and covered in chocolate, available in the following Hershey's flavors: Hershey's with Almonds, Almond Joy, Reese's peanut butter, York Peppermint Patty, Caramel, and Cookies 'n Creme. Mini kisses cookies are shaped like Hershey's kisses and are available in the following flavors: Chocolate Chip, Double Chocolate and Confetti Sprinkles. Layered cookies are two cookies with a layer of sandwich creme in the middle and are available in the following flavors: Hershey's, Reese's and Heath.

Really Nuts, snack nuts and trail mixes. Available in the following flavors: Reese's Roasted Peanuts, Reese's Honey Glazed Peanuts, Hershey's Chocolate Cocoa Peanuts, Mauna Loa Cashew Nuts, Hershey's Trail Mix, Reese's Trail Mix and Mauna Loa Trail Mix.

Snack Barz, candy bars similar to rice krispie treats. Available in the following flavors: Hershey's Chocolate Crme, Reese's Peanut Butter, Hershey's S'mores Marshmallow Crme, Caramel, and Cookies 'n Crme.

Snacksters, 100-calorie packs of cereal puffs mixed with a variety of other Hershey's and Reese's items such as chocolate chip cookies, semi-sweet and milk chocolate chips, peanut butter chips, cereal squares, and Reese's pieces.
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Available in five varieties, Hershey's, Hershey's Kisses, Hershey's S'Mores, Twizzlers, and Reese's.[2]

Sweet 'n Salty Granola Bars, granola bars combined with other Hershey's and Reese's ingredients. Available in three flavors: Hershey's with pretzels, Reese's with chocolate and Reese's with peanut butter.

TasteTations, Hershey's first hard candy. Made in butterscotch, caramel, chocolate, and peppermint varieties.

Twizzlers, artificially flavored licorice sticks in various flavors. This includes the Twizzlers Pull And Peel variety, in which the sticks are composed of semi-distinct smaller twisted rods of Twizzlers, which can be easily pulled apart.

Miscellaneous products

Hershey's makes military chocolate for the U.S. Military.

Cacao Reserve by Hershey's Cacao Reserve by Hershey's was marketed as a premium line in comparison to Hershey's other chocolate products.[6] It was discontinued in July 2009.

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Signature Collection, the original series in this line. It came in fthe varieties: 35% Cacao Premium Milk, 35% Cacao Premium Milk with Hazelnuts, 65% Premium Dark, and 65% Premium Dark with Cacao Nibs.

Single Origin, chocolate bars which differed from the Signature Collection bars in that each bar was made from cacao beans that grew in a single region. These origins were So Tom with 70% cacao content, Santo Domingo with 67% cacao content, Arrba with 50% cacao content, and Java with 37% cacao content.

Truffles were tins, in approximately the same size as those used by Altoids, which contained eight small chocolate truffles with either 35 or 60 percent cacao content.

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Partnerships

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Hersheys seek to build strong relationships with suppliers that are mutually beneficial and that drive innovation and best practices for the total supply chain. Hershey has developed responsible sthecing programs to continuously improve the supply chain. India They manufacture, market, sell and distribute confectionery, beverage and cooking oil products in India, including NUTRINE and GODREJ confectionery and beverage products

Canada Principal products they sell in Canada are HERSHEYS milk chocolate bars and milk chocolate bars with almonds; OH HENRY! candy bars; REESE PEANUTBUTTER CUPS candy; HERSHEYS KISSES brand milk chocolates;TWIZZLERScandy;GLOSETTE chocolate-covered raisins, peanuts and almonds;JOLLY RANCHER candy; WHOPPERS malted milk balls; SKOR toffee bars; EAT MORE candy bars; POT OF GOLD boxed chocolates; and CHIPITS chocolate chips.

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Mexico They manufacture, import, market, sell and distribute chocolate and confectionery products in Mexico, including HERSHEYS, KISSES, JOLLYRANCHER, and PELNPELO RICO chocolate, confectionery and beverage items.

Brazil They manufacture, import and market chocolate and confectionery products in Brazil, including HERSHEYS chocolate and confectionery items and IO-IO items.

Supplier Programs The Hershey Company has a long history of operating with high ethical standards and integrity. They seek to build strong relationships with suppliers of diverse ownership. The Hershey Company invites these companies to register as a potential supplier of goods and services in support of the global operations. Hershey's Food Service HERSHEY'S Food Service is one of the industry's leading branded sweet ingredient suppliers. They offer a broad line of branded products including cocoa, syrup, toppings and chips for ythe culinary needs. Create and enhance ythe own
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signature recipes using HERSHEY'S, REESE'S and HEATH branded products across all dayparts. Hershey's Fund Raising Candy is the #1 fund-raiser! What fund-raising event would be complete without HERSHEY'S Fund Raising products? Hershey's Vending Vending-ready product lines and state-of-the-art vending machine services. Hershey's Concession Concession sales drive theater profitability, delivering more gross margin than ticket sales! HERSHEY'S Concession breakthrough brands and comprehensive support programs maximize concession sales and earn bigger profits all year long!

Hershey's Convenience HERSHEY'S is the perfect partner for retailers across the Convenience Store Industry. The HERSHEY'S Convenience website provides a first look at new

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products and current promotions, plus quick and easy access to exclusive offers and important sales tools. Hershey's Order Connection HERSHEY'S Order Connection is a 24/7 real-time environment where their business customers can place and track orders, view and print invoices, download a product catalog, and view a variety of other data. Electronic Data Interchange(EDI) HERSHEY'S EDI saves their partners time and money by streamlining business transactions via a secure electronic connection.

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Market Competition & Comparision

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Growing Global Demand Makes International Expansion Attractive

Huge markets in China, India and other developing countries also present a big opportunity for Hershey's. Chocolate sales in China have doubled to $813 million over the last five years while India's chocolate sales have risen 64% over the same period Hershey's has tried to move into these markets with through joint ventures with Lotte Confectionery of South Korea and Godrej in India. Still, with 90% of sales within North America, international expansion remains a big opportunity. In April 2010, Hershey's announced plans to open its first store in Singapore; it hopes to open six additional stores in the country within three years. The company is also investigating expansion opportunities in Indonesia, Malaysia, and Thailand, with each country eventually supporting fthe to six stores. In the Middle East, the company is looking to UAE, Kuwait, and Qatar as possible store locations with fthe to six stores in the UAE and two or three in the other two countries eventually. Although Hershey's bid for Cadbury was unsuccessful, the company is still looking to international markets for its growth prospects; the company has said they are interested in acquiring foreign candy companies in order to expand their global footprint.

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Industry Overview
The total chocolate candy sales for 2002 through 2007 increased slowly but leveled off between2004 and 2006. In the past year the sales have raised but not significantly. Figure 1 below shows thisdata.

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The total confection sales between 2002 and 2007 started off stable and then slowly increase Approximately a billion dollars each year. Figure 2 shows this data.

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The chocolate sales for Every Day for 2002 and 2007 significantly increased every year. Figure 3 below show this data.

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The chocolate sales for Every Day by market share of chocolate steadily increased each year. Figure 4 below shows this data

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On January 19, 2010, Kraft Foods (KFT) bought Cadbury for $19.5 billion, outbidding Hershey to create the largest chocolate and confectionary company in the world. The merger hurts Hershey's international growth prospects as the company had been hoping Cadbury would greatly expand Hershey's brands beyond their current domestic marketplace. In the wake of the merger, rumors have circulated that Nestle (NSRGY) is looking to buy a smaller competitor such as H.J. Heinz Company (HNZ) or General Mills (GIS), and Hershey's name has also been mentioned. However, a spokesman for the Hershey Trust has categorically denied any possibility of a takeover.Despite the Trust's denial, rumors are still circulating about a possible takeover by Nestle, especially since the company's recent sale of Alcon to Novartis for $28.1 billion. With the new cash, Nestle could buy almost any food or confectionery business with cash; Hershey's shares are currently valued around $10 billion.

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59

COMPETITORS
Primary Competitors Mars | Nestle | Russell Stovers Secondary Competitors Lindt | Godiva | Ferrero Rocher | Scharffen Berger | Cadbury | Brachs | Storck The primary competitors are the top marketers in the chocolate industry with the largest market share percentages. The secondary competitors are also known as specialized marketers. Both the primary competitors and secondary competitors market share percentages are determined by the amount of sales of chocolate candy they sell each year. See details above for a list of Hershey competition.

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Hersheys dominates the chocolate market share with a steady increase over the past five years. In 2002 Hersheys market share had 41.6% and in 2006 they had 43.0%. In comparison, Mars and Nestle have lost market share. Mars has decreased .9% from 2002 to 2006. Nestle has gone down .3% over the past five

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years. Despite Hersheys dominance in market share, Mars is leading in brand sales with M&Ms. M&Ms brand has increased sales significantly over the past three years. M&Ms has increased from$210.4 million in 2005 to $246.5 million in2008. On the other hand Hersheys kisses brand sales have fallen from $128.1 million to $125.2million in the past year. Although Hersheys is stealing the market share from Nestle and Mars, brand sales of Mars M &Ms is pulling most of the weight in the Mars market share. Meanwhile, Hersheys Kisses is the brand sales leader for Hersheys, but other Hershey brands also contribute to the overall leading market share. Reeses brand is stabilizing in sales, which is a factor in Hersheys leading market share. Hersheys Kisses leading demographic is white women ages 45 to 54 in southeast. It is evident that this demographic is buying less of Hersheys Kisses. Yearly company sales for Hersheys once again lead over Nestle and Mars between2002 and 2006. Hershey sales grew from $1.7billion in 2002 to $1.96 billion in 2006. Mars decreased in sales between 2003 and 2005 but jumped back up to $1.13 billion but still not reaching Hersheys leading company sales. Nestle came in third in the overall U.S. Chocolate Sales. Overall, there is a noticeable trend in the growth of the chocolate market and Hersheys consistent growth as a chocolate market leader.

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In conclusion, Hershey leads over the chocolate market in sales and in market shares. However, Hershey Kisses falls behind Mars M&Ms in brand sales.

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ANALYSIS AND INTERPRETATION

According to brand preference rates among U.S. adults Hersheys Kisses claim the top spot with a preference rate of 6.3%. Nestle Crunch comes in last with a rate of 0.8%. A complete list of the six brands is show in statistics below :

Hersheys Kisses 6.3% Mars M&Ms 4.8% Mars Snickers 3.6% Reeses Peanut Butter Cups 3.5% Nestle Butterfinger 2.0% Nestle Crunch 0.8% Figure below shows the preference rates of adult consumers of the top chocolate brands between the years 2003-2006. While all six brands had a decrease in their consumption rate over the past four years Mars Snickers lost the most ground with a 5.2% decrease in consumption. In 2003 Snickers had a 20.0%consumption rate and in 2006 the consumption rate declined to 14.8%. Nestle Butterfinger had the least percent change with a 2.2% decline; the consumption rate changing from 10.8% in 2003to 8.6% in 2006.

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Chocolate Brands Purchasing Index by Gender 2006 BRAND Hershey Kisses Butterfinger Butter Cups M&M's Snickers Crunch BASE % 15.04% 8.61% 12.09 6.61 14.81 3.71 MALE 84 98 102 89 106 108 FEMALE 116 102 98 110 94 92 DIFFERENCE -31 -4 4 -21 12 16

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Chocolate Brands Purchase Index by Age 2006 Brand Kisses (Hershey) Reeses(Hershey) M&M(Mars) Snickers(Mars) Crunch( Nestle) Butterfinger(Nestle) 18-24 101 116 104 123 120 111 25-34 87 118 103 104 130 94 35-44 97 126 123 113 126 103 4554 110 92 108 100 102 92 5564 107 87 98 90 63 102 6574 104 70 64 91 60 116 75+ 91 56 58 57 56 87

Chocolate Brand Purchasing Index by Race/ Ethnicity 2006

BRANDBASE%WHITEHISPANICBLACKASIAN

Kisses Reese's M&M's Snicker's Crunch Butterfinger

15.04% 12.09% 12.61% 14.81% 3.77% 8.61%

105 106 107 93 83 98

93 67 84 105 118 82

89 121 90 146 159 159

80 57 76 94 177 66

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LIMITATIONS
Hersheys, Mars and Nestle are allcompanies that dominate the chocolate industryin terms of sales of everyday chocolate.However, all three companies have their ownstrengths and weaknesses. Hershey has hadproblems over the past two years trying toincrease their sales. While they lead thechocolate market in terms of sales, in 2006 theysold $1.96 billion in chocolate, sales haveremained relatively stable with no significantincrease or decrease. Another weakness of theHershey Company is the lack of spending onadvertising in the past year and neglecting topromote core brands in favor of pushing limitededitionproducts. These two weaknesses havehurt their sales in terms of chocolate.

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Financial Analysis
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Hershey Foods (NYSE HSY) is North America's largest chocolate producer. With 42.5% of the US chocolate market, Hershey sells products in 50 countries under 60 brand names including, Hershey's, Reese's, and Kisses In 2009, the company's net revenues were nearly $5.30 billion with net income of $436 million. Additionally, Hershey maintains the right to manufacture and sell competitors' products, such as Kit-Kat bars, through licensing agreements with foreign Nestle (NSRGY) and Cadbury Schweppes (CSG).

Rising costs are a particularly difficult challenge for Hershey. The company is particularly vulnerable to market prices of key ingredients like cocoa, milk, sugar and peanuts, all of which saw price increases in 2009. In order to combat rising costs, the company has both lowered product weight and raised domestic wholesale prices. With the recent turmoil in the Ivory Coast, which produces 40% of the world's raw cocoa, prices for this vital chocolate ingredient have risen more than 15% since November 2010. Most recently, the president-elect issued a largely symbolic ban on the export of cocoa until March, however his power currently doesn't extend beyond the confines of his barricaded hotel. The long-term effect of the conflict on chocolate prices remains to be seen but it closely follows crop

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plagues in both Ghana and Indonesia which threatened the cocoa supply in mid2010. On January 19, 2010, Kraft Foods (KFT) bought Cadbury for $19.5 billion, outbidding Hershey to create the largest chocolate and confectionary company in the world. Business Financials

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Quarterly Earnings Q1 2010 In the first quarter of 2010, Hershey's posted revenues of $1.41 billion, an increase of nearly 14% from Q1 2009; net income nearly doubled to $147 million. Higher core brand sales volume and improved pricing were the major forces pushing the substantial increase in net sales for the quarter, however the quarter also benefited from a seasonal volume shift from Q4 2009 to Q1 2010. Excluding sales at WalMart (WMT), Hershey's market share increased 0.5% for the quarter with the company's consumer take away (including Wal-Mart) increasing 7.5% or 5.5% if you discount the increase that resulted from an early Easter season that atypically fell into Q1 this year. In particular, the core brands that the company spent money advertising saw their takeaway increase 10%. Valentine's Day, usually the largest holiday of the quarter, was difficult for the entire candy industry this year with consumer spending and gifting down; Hershey's Valentine's season sales decreased by less than 10% and accounted for a 1% decline in market share for the quarter. The company has completely cycled through its August 2008 price increases and is still seeing base volume growth; feeding off the company's better-than-expected revenues for the quarter, advertising expenditures are expected to increase 35%40% in 2010. Internationally but excluding Canada, sales increased 14% for the

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quarter with strong earnings growth in Mexico, China, Brazil, and Canada. In contrast, India saw a decline in sales which offset some of the gains realized in these other countries. Q2 2010 In the first quarter of 2010, Hershey's posted revenues of $1.23 billion, an increase of 5.3% from Q2 2009; net income decreased by more than 34% to $46.7 million. The fall in net income was primarily attributable to business realignment and impairment charges. Without these charges, net income would have increased nearly 18%.The increased revenues were driven by a 3% increase in sales volume for the company's core US brands. Hershey's market share (excluding sales at WalMart increased by 0.3% and the consumer takeaway (including Wal-Mart) increased by 4%. Lower supply chain costs more than offset a slight increase in the cost of raw materials. The business realignment charges that affected the company's net income stemmed from a $44.7 million devaluation of the Godrej Hershey joint venture in India. Hershey's bought Godrej and started the joint venture in 2007, but it has not grown at the rate originally expected. Delays with rolling out nation-wide distribution, failing to implement higher pricing, and a poor Indian sugar crop have all affected the company's business in India to date. Although the company did not release specific figures for its various international

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operations, business in Mexico, Brazil, China and India all grew during the quarter, though the company admits that India is not growing as quickly as they had planned. Q3 2010 In the third quarter of 2010, Hershey's posted revenues of $1.5 billion, an increase of 4.2% from Q3 2010; net income for the quarter increased 11.2% to $180.2 million. Operating income for the quarter grew 11.2% to $655.2 million. Sales of core brands increased by 2.5%, international sales volume increased, and improved pricing contributed 1% to revenues for the quarter. Consumer takeaway increased more than 3.5% during the quarter and the company's market share grew slightly by 0.1%. The company's performance in America steadily built on last quarter's progress but there were no major increases in any segment, except for a slight increase in advertising which is now expected to be 50-60% more for the year than in FY 2009. Internationally, sales outside the US grew by more than 10% concurrent with an increase in advertising spending outside North America that was 65% higher than in Q3 2009. The company is launching two new products in Q4 (Hershey's Drops and Reese's Minis) and since Halloween fell near the end of the quarter, a certain portion of sales from the holiday will be accounted for in Q4.

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Trends and Forces Rising Commodity Costs Pressuring Margins Rising commodity costs are putting negative pressure on Hershey's operating margins. Hershey's is particularly sensitive to the prices of commodities like cocoa, milk and sugar which are all key ingredients in Chocolate making. Since the beginning of 2008, prices for key ingredients like cocoa, milk, sugar and peanuts are all up 20% to 40%. These rapid price increases show no signs of abating as Hershey's predicts commodity prices will increase twice as fast in 2009 compared to 2008. Much of this rise comes increases in sugar, which almost doubled between January and August 2009. Hershey's combats increasing input costs with a combination of price increases and various hedging strategies. In 2008 alone, the company has twice raised wholesale prices[47]. The election conflict in the Ivory Coast, the world's largest cocoa producer, has resulted in a cocoa price increase of more than 15% since November 2010. The Ivory Coast produces approximately 40% of the world's total cocoa supply, The president-elect AlassaneOuttara issued a largely symbolic ban on the export of cocoa until March 2011, however his power currently doesn't extend beyond the confines of his barricaded hotel. The long-term effect of the conflict on chocolate prices remains to be seen but it closely follows crop plagues in both Ghana and
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Indonesia which threatened the cocoa supply in mid-2010. Following the announcement of the export ban, cocoa prices immediately rose an additional 7%.

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SIX-YEAR CONSOLIDATED FINANCIAL SUMMARY All dollar and share amounts in thousands except market price and per share statistics

5-Year 2009 Compound Summary of Operations 3.7% Growth Net Sales ...................................................................... Rate Cost of Sales ................................................................ 4.0% Selling, Marketing and 6.9% Business Realignment and Administrative .......................................................... Interest Expense, Net .................................................. 6.3% Impairment Charges, Net ......................................... Provision for Income Taxes ....................................... 0.0% Net Income .................................................................. (5.4)% Net Income Per Share: (3.5)% 2008 2007 2006 2005 4,819,827 2004 4,416,389

$ 5,298,668 5,132,768 $ 3,245,531 3,375,050 $ 1,208,672 1,073,019 $ $ $ $ $ $ $ $ 82,875 90,459 235,137 435,994 1.77 1.77 1.97 1.90 167,136 94,801 97,876 180,617 311,405 1.27 1.27 1.41 1.36 166,709 60,777 228,697 197,839 1.19 65,110 1.0712 6.1% 8.4% 227,183 161,133 645,456 262,643 20,336

4,946,716 4,944,230 3,315,147 3,076,718 895,874 860,378 276,868 118,585 126,088 214,154 .87 .87 .96 .93 168,050 60,813 231,449 190,199 1.135 62,064 1.0206 4.3% 9.7% 292,658 127,896 645,083 189,698 14,194 14,576 116,056 317,441 559,061 2.19 2.17 2.44 2.34 174,722 60,817 239,071 178,873 1.03 56,256 .925 11.3% 11.5% 181,038 108,327 645,480 183,496 15,016

2,956,682 2,672,716 912,986 867,104 96,537 87,985 277,090 488,547 1.85 1.84 2.05 1.97 183,747 60,821 248,292 170,147 .93 51,088 .84 10.1% 11.7% 200,132 125,023 647,825 181,069 13,236 66,533 235,399 574,637 2.11 2.09 2.31 2.24 193,037 60,844 256,934 159,658 .835 46,089 .7576 13.0% 11.6% 171,229 137,931 614,037 181,728 14,158

DilutedClass Stock ....................................... (3.3)% BasicClass B B Stock .................................... BasicCommon Stock ..................................... (3.1)% DilutedCommon Stock ................................. (3.2)% Weighted-Average Shares Outstanding: BasicClass B Stock ....................................... BasicCommon Stock ..................................... Diluted .............................................................. Dividends Paid on Common 4.4% Per Share ................................................................... 7.3% Stock ......................................................................... Dividends Paid on Class B Stock ................................ 7.1% Per Share ................................................................... 7.2% Net Income as a Percent of Net Non-GAAP Adjusted Income as a Sales, GAAPBasis ..................................................... DepreciationNet Sales(a) ............................................ (1.6)% Percent of ................................................................ Advertising .................................................................. 11.8% Payroll .......................................................................... 0.0% (7.0)% Year-end Position and Statistics CapitalizedSoftwareAdditions ..................................... 6.2% Capital Additions ........................................................ Total Assets ................................................................. (0.6)% Short-term Debt and Current (42.4)% Long-term Portion of Debt ......................................... 16.8% Portion of Long-term Debt ....................................... Stockholders Equity .................................................. (7.7)% Full-time Employees ................................................... Stockholders Data Outstanding Shares of Common Market Price of Common Stock at Stock and Class B Stock at (8.4)% Year-end ................................................................... Year-end ................................................................... Range During Year .....................................................

$ $ $ $

60,709 228,995 198,371 1.19 65,032 1.0712 8.2% 9.4%

$ $ $ $ $

157,996 241,184 613,568 126,324 19,146

$ 3,675,031 3,634,719 501,504 $ 39,313 $ 1,502,730 1,505,954 349,944 $ 760,339 12,800 12,100 227,998 227,035

4,247,113 4,157,565 856,392 843,998 1,279,965 1,248,128 623,520 683,423 12,400 12,800 227,050 230,264

4,262,699 3,794,750 819,115 622,320 942,755 690,602 1,016,380 1,137,103 13,750 13,700 240,524 246,588

35.79

34.74 39.40

49.80 55.25

55.54

$42.2530.27 44.32 32.10

56.7538.21 57.65 48.20

67.3752.49 56.75 37.28

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SUGGESTIONS AND RECOMMENDATIONS

They should focus more on their CSR priorities and goals

They should effectively control Workplace:They should strive to provide a dynamic and challenging workplace that gives employees the opportunity to develop their skills and talents. Hersheys continued business success depends on an engaged workforce that is able to meet the challenges of a rapidly changing global marketplace.Their unique heritage, strong core values and legacy of living up to the highest ethical standards enable Hershey to attract and retain highly talented employees.

Environment: They should minimize the negative effect on the environment while making progress and while meeting their functional requirements. They should concentrate on effective product design, sustainable sourcing and effective business operations

Community:They have made a positive impact in their communities for more than 100 years. Their marketplace success makes this investment possible. As the company evolves and grows, they should continue to build

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on their heritage of making a difference in the communities where they live and work.

Marketplace:They should be dedicated towards driving integrity across their entire value chain, from the ethical sourcing of raw materials to how they engage with consumers around the world. Hershey is an industry leader in fair and ethical business practices. As their company expands to meet the demands of the global marketplace, their mission and values guide them in delivering high-quality products while engaging their stakeholders on the issues that matter most to them.

Shareholders perspective:Increasingly, their stakeholders are interested in how they conduct their global business. They should value their perspective in helping them set their CSR priorities.

Their progress on CSR prioritiesrequires coordination with their business partners. Providing an appropriate return to investors allows them the freedom to satisfy other stakeholders. Their success depends on the trust consumers place in us. By making the communities where they live and work better, they gain their
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support to enable their success. Satisfied and engaged employees make better business decisions. They bring focus and resources to interest groups and nongovernmental organizations (NGOs) that help further their interests as a responsible company. They should strive to positively impact public policy and regulation through constructive engagement with regulators.

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CONCLUSION
Results of my study indicated that Hersheys have demonstrated excellent progress in a difficult economic environment. Hersheys exceeded net sales targets, while implementing price increases and operational efficiency improvements necessary to offset significant increases in input and employee benefits costs. Hersheys have essentially completed the global supply chain transformation program and have achieved their objectives. They increased advertising investment in our core brands in North America and in certain of our key international markets, while also achieving strong growth in adjusted earnings per share-diluted. They generated strong cash flow from operations and our financial position remains solid.

Net sales increased 3.2%, which was within their long-term growth target. The increase was driven by price realization, as sales volumes declined at less than expected rates due to pricing elasticity. Earnings per share growth exceeded our long-term objective and our North American market share increased during the year. Their financial results and marketplace performance for the year indicate that their consumer-driven approach to core brand investment along with necessary pricing actions enable them to continue to meet their long-term financial goals.

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Their efforts will remain focused toward implementing our major strategic initiatives to deliver sustainable long-term growth in the evolving marketplace.

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BIBLIOGRAPHY
http://en.wikipedia.org/wiki/preference http://www.scribd.com/ http://www.nyse.com/ http://www.hersheys.com/ http://investing.money.msn.com/investments/company-report/ http://www.anico.com/annual_reports.dhtml/ www.annualreports.com/ http://www.fieldmuseum.org/chocolate/making.html/

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Annexure

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Questionnaire
PERSONAL DETAILS Name: Address: Age: Gender: Marital Status: Education: Phone number:

1.Brand Trial

a. Which of these brands have you eaten? b. What did you think of it? c. Was it for someone like you? Why or why not? d. For the brands they have not tried: Why not? 2. How often do you eat candy in the following situations? 1.Never 2. Sometimes 3. Always Studying in general On a Road Trip Cramming for a test When Im Stressed Eating during astudy break 123 123 123 123 123
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When Im with others To reward myself

123 123

3. In the past 30 days, what three candy brands have you eaten the most? 1.________________ 2.__________________ 3.____________________

4. Of the brands you listed above, which one have you eaten the most? 1.__________________ 5.How much importance do you give to the following factors when you purchase a chocolate? (Tick in the desired column)

Factors

Very Important

Important

Normal

Least Important

None

Flavor/taste Price Quality Packaging Form Brand Image Color Shape Quantity

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6. How much are you satisfied with the following factors in your preferred chocolate? (Tick in the desired column) Factors Very Satisfied Satisfied Normal Least Satisfied Cant Say

Flavor/taste Price Quality Packaging Form Brand Image Color Shape Quantity

7. Which of these factors affect your purchase? Advertisement Suggestion from friends and relatives Attractive Display Doctors Advice Brand Ambassadors
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 Ingredients 8. Which media of advertisement influence your purchase? Television Newspapers Brochures

Hoarding

Display

9. If you dont like to change to the new brand, then what are the reasons for continuing to purchase the old brand?

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