Why Hershey Is Questioning Its Future In Chocolate

in 1929 Milton Hershey the biggest name in chocolate was worried his flagship product wasn't enough to sustain his business long term but just as Milton was looking to branch out the stock market crashed assuring him the Great Depression and scuttling any mergers now more than a century later the company is grappling with the same concern its founder was is chocolate enough in 1894 Milton Hershey had an idea make chocolate which was a luxury for the rich affordable for the masses by 1909 Hershey Chocolate Company was the largest confectionery company in the US and dominated market share and as her she grew so did the town around it there was Hershey Park Hershey theater for she hotel her kazoo and there was the Hershey orphanage to no fanfare Milton Hershey had quietly set up a trust to support a school for orphans the school which has since expanded to include children of need still exists today but through the years there's been increasing doubt about the ability of chocolate alone to support the Hershey Company after half a century of being the only chocolate player in town Mars became a tough competitor the owner of M&M and singers Forrest Hershey to finally create a marketing department in the 1960s syrup also been absent flows and concerns without chocolate itself fears about caffeine let Hershey to build its Tech Center that still exists today later sugar would be a focus certainly one of the things that consumers are trying to focus on the most is cutting sugar and that of course is is a headwind for things like sugar confections where there has been a little bit slower growth her she has over the years tried to buffer these risks it's bought or owned friendly ice cream parlors pasta cookies bars and nuts none stuck efforts to grow internationally have also been challenged it considered buying Cadbury in England but it was too expensive it's not that common in England so it's a bit of a tree looking around here there's a bunch of different things like brands I hadn't heard of by 2002 the Hershey trust was concerned it relied on dividends from the Hershey company to fund the school that Milton had founded if something happened to the chocolate business those funds would be at risk so it announced it was putting her she's up for sale but the town that her she built revolted they were out pours of protests with concerns about the loss of jobs and the loss of Milton's legacies these people are here because they don't want Hershey foods sold to an outsider they don't want it sold period at last minute under immense pressure the Trust reversed course her she again rebuffed takeover attempts in 2007 and 2016 today the company is asking itself the same question that Milton was in 1929 what becomes of a company that makes its money mainly in the u.s. chocolate the risks though are more dire more confection competitors have come into the u.s. and concerns around sugar are even greater you're seeing salty snacks in particular growing at around 4% where chocolate candy was around 2 under new CEO Michelle Bach it's trying to remake itself as a snacking powerhouse chocolate of course was one of the original snacks it's launched snack affection products the combination of sweet and savory goods it's but healthier snack brands like skinny pop popcorn and crave beef jerky the world looks very different today than it was five years ago or 10 years ago Michelle buck recently told CNBC and we learned a lot across many aspects of the business and I feel very committed to our strategy [Music] hey there thanks for checking out CNBC on YouTube be sure to subscribe to stay up-to-date on all of the day's biggest stories you can also click on any of the videos around me to watch the latest from CNBC thanks for watching

Channel: CNBC

Views: 778,686

Keywords: CNBC, Mad Money, Squawk Box, Power Lunch, Opening Bell, Closing Bell, Financial News, Finance News, Stock News, Stocks, Trading, Investing, Stock Market, US News, World News, Digital Original, hershey, hershey park, hershey commercial, hershey park 2018, hershey bites, hershey chocolate cake, hershey chocolate factory, hershey chocolate bar commercial, hershey chocolate bar cake, hershey company history, hershey company case study, hershey company, chocolate industry

Id: 9rLHqngh9jU

Length: 4min 28sec (268 seconds)

Published: Tue Apr 24 2018