The Hershey Company was founded in 1894 by Milton Hershey and is headquartered in Hershey, Pennsylvania. The town itself was largely built by Milton, and many places in the town bear his name, including Hershey’s Chocolate World and Hersheypark. Hershey’s Chocolatetown at Hersheypark was one of the largest construction projects in the United States as of January 2019, with a cost of 150 million dollars.
The company’s generous market share of around 43% (in 2019) in the United States is due to the confectionery company`s popularity across brands. In a 2018 survey, three of the top four most popular chocolate brands among consumers were sold by Hershey’s. When it comes to Halloween candy, the company’s Reese’s Peanut Butter Cups were the prized chocolate among trick-or-treaters of all ages.
A global leader spread across 70 countries with a hundred different chocolate products – different shapes, types, flavors, and colorful wrappers. It employs around 14500 people worldwide.
In 2019, Mars Incorporated was the world’s leading confectionery company, with generated sales numbers of up to $18 billion. Mars is known for its candy and chocolate brands but it also focuses on pet care products and affordable meals. While Mars Incorporated was the leader in terms of net sales, The Hershey Company is also one of the largest companies in the industry today.
With a U.S. market share of 30.2 % in 2018, Hershey’s was the leading confectionery company in the United States, beating Mars with almost one percent (29.4%). In terms of chocolate production specifically, Hershey’s had a U.S. market share of 43.3%, while that of Mars stood at roughly 30 percent in 2018.
Company’s History
The company would remain infamous if Milton S. Hershey, the founder, and his wife, Kitty would board the Titanic, as per their plans (1912). It was the business that kept him home (some say Kitty was unwell) and the craft left the docks without them to become famous in history.
Milton Hershey received apprenticeship to a confectioner in 1873, and hence founded a candy shop that was alive for only six years. Then, he founded another confectionery where he learned to make caramel; Caramel was Milton’s first love but unfortunately, it also turned out to be another failed business attempt.
Hershey’s chocolate company has traces of its origins to the 1880s; that was the time when Milton S. Hershey founded the Lancaster Caramel Company which turned into a global juggernaut having more than 1400 employees. His inspiration to dive into the chocolate business was his first interaction in the World’s Columbian Exposition of 1893 in Chicago with German-made chocolate-processing machinery.
In 1894, the 17 years old started Hershey’s chocolate company. The caramel company was sold to a competitor in 1900 for $1,000,000 at that time and the entire focus was given to the chocolate company. The business was so successful that Hershey decided to grow it further by starting a new factory in Derry Township, Pennsylvania in 1903; the factory was built without windows to minimize the distraction of the employees. To date, this is the world’s largest chocolate manufacturing plant.
Centering the chocolate factory, Milton developed a town for his employees. He designed and built a model town with leisure activities. He deeply believed in the fact that in order to achieve his company’s thrive, his employees should stay happy. This township later got the name Hershey, Pennsylvania. At present, this place has developed into a city with Hershey’s amusement park, Hershey’s Museum, Milton Hershey School, Hershey Centre for Applied Research, Hershey’s Chocolate World, and many more attractions. Hershey also operated an airpark for common people to take flight lessons along with experiencing aerial sightseeing. This only lasted for a few years, from 1944 to 1981.
Product line
The net sales of the company stood at $ 7.99, with an operating profit of $1.6 billion. Gross profit in 2019 was $3.62 billion, almost consistent between 2013 to 2019.
Hershey’s owns five of the top 10 confectionery brands. This includes Hershey’s, Hershey’s Kisses, Ice Breakers, Kit Kat(only for the US, under license by H. B. Reese Candy Company, a division of The Hershey Company) and Reese’s. The company has a great impact on the confectionery industry; what the company does trickles the industry. It has a huge product line ranging from the chocolate-based candies to the non-chocolate snacks and candies; brownies, cookies, snacks nuts, Hershey’s syrup all gets in. The ones that have gained maximum popularity are – Hershey’s chocolate bar, Reese’s Peanut Butter Cup, Hershey’s Kisses.
It is still not known how Hershey’s Kisses got its name. The product hit the market in 1907. The popular theory which goes around is, the candy got its name for the sound it makes when it is deposited during manufacturing. The wrapping machine for this wasn’t developed till 1921; till 14 long years, individual candy was hand wrapped. Also, the logo of Hershey’s Kisses has a kiss hidden between ‘K’ and ‘I’. The company also made a Guinness World Record for making the world’s largest piece of chocolate, a giant KISS (weight 30,000 pounds), on the 100th-anniversary celebration.
Easy Chew was the only gum product which was started by Milton Hershey to put his rival, Beech-Nut Gum out of business. It was done in the consequence of taking revenge from Beech-Nut Gum, as it started making chocolate. The product was introduced in 1915 but had a short life span of 9 years due to the trouble in importing sugar and chicle (natural gum). At present Hershey owns the gum brand Ice Breakers.
Hershey’s is also known for being the largest almond buyer in North America. This is due to the fact that it produces a huge number of almond products – Almond Joy, Hershey’s Pieces with Almonds, Hershey’s Nuggets, also Hershey’s Kisses white chocolate with almond.
The company also contributed to World War II by being a part of the military of the United States. Hershey’s made ration bars that could withstand combat conditions faced in the war; its taste was made bitter to prevent the troops from having them as chocolates. About a billion of these bars were sold – 1941 to 1945.
Just not World War, Hershey’s chocolate made it to the moon. A heat resistant bar, Hershey’s Tropical Chocolate Bar was taken to the moon by Apollo 15 for the astronauts. The bar could sustain in 120 degrees for more than an hour.
Brand Equity
The company followed the marketing approach of strong brand equity, product originality, and development of constant superior product quality. It has the advantage of brand awareness and brand reliability. It applies a micro-marketing concept, where precise products are marketed to small target audiences, next they modify these products to meet the specific demand of the audience.
Also Read: Cadbury – The Chocolate Brand Bringing Moments Of Joy Across The World
It also targets the holiday season, a special theme design is done for chocolates and candies. It keeps itself connected to its customers by information sharing strategy. Hershey’s website shares information about its products, history, recipes, videos, and much more interesting things.
The brand’s marketing was started as an affordable luxury. It always believed in gaining popularity by word of mouth rather than the traditional media advertisement.
But in 1960 it took a leap of faith in TV advertisements. Eventually, Kisses became the face of Hershey; it was introduced as a playful TV advertisement character. Recently to make the innovation public, the company increased its advertising budget. In 2016 it almost invested 3 times more in digital media than the previous year.
The reason behind the company’s success is evident from its mission and vision statement – “Continuing Milton Hershey’s legacy of commitment to consumers, community and children, we provide high-quality Hershey’s products while conducting our business in a socially responsible and environmentally sustainable manner.” Alongside, Hershey being an eco-friendly company looks up to its social responsibility by keeping the environment safe. In 2009, it saved more than $25 million dollars by using environment efficient products and processes.
It should be the word that chocolate is a permanent thing, and so is Hershey.
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