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 “our” 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. Our 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.
We operate as a single reportable segment in manufacturing, marketing, selling and distributing various package types of chocolate and confectionery products, pantry items and gum and mint refreshment products under more than 80 brand names. Our five operating segments comprise geographic regions including the United States, Canada, Mexico, Brazil and other international locations, such as India, Korea, Japan, the Middle East, China and the Philippines. We market confectionery products in approximately 50 countries worldwide.
For segment reporting purposes, we aggregate our operations in the Americas, which comprise the United States, Canada, Mexico and Brazil. We base this aggregation on similar economic characteristics; products and services; production processes; types or classes of customers; distribution methods; and the similar nature of the regulatory environment in each location. We aggregate our other international operations with the Americas to form one reportable segment. When combined, our other international operations share most of the aggregation criteria and represent less than 10% of consolidated revenues, operating profits and assets.
Selling and Marketing Organization
Our selling and marketing organization is comprised of Hershey North America, Hershey International and the Global Marketing Group. This organization is designed to:
• Leverage our marketing and sales leadership in the United States and Canada;
• Focus on key strategic growth areas in global markets; and
• Build capabilities that capitalize on unique consumer and customer trends.
Hershey North America
Hershey North America has responsibility for continuing to build our chocolate and confectionery market position, while capitalizing on our scale in the U.S. and Canada. This organization leverages our ability to capitalize on the unique consumer and customer trends within each country. This includes developing and growing our business in our chocolate, sugar confectionery, refreshment, pantry, and food service product lines. A component of Hershey North America, The Hershey Experience, manages our retail operations within the United States that include Hershey’s Chocolate World in Hershey, Pennsylvania; Hershey’s Times Square in New York, New York; and Hershey’s Chicago in Chicago, Illinois.
Hershey International markets chocolate and confectionery products, beverages and pantry items worldwide and has responsibility for pursuing profitable growth opportunities in key markets, primarily in Latin America and Asia. This organization is responsible for international subsidiaries that manufacture, import, market, sell or distribute chocolate, confectionery and beverage products in Mexico, Brazil and India.
Hershey International manufactures confectionery products for the markets in Asia, particularly in China, under a manufacturing agreement with Lotte Confectionery Co., Ltd.
A component of Hershey International, International Marketing and Innovation, manages our Hershey’s Shanghai retail attraction in Shanghai, China.
Global Marketing Group
Our Global Marketing Group has responsibility for building global brands, developing transformational growth platforms, brand positioning and portfolio strategy. This organization also develops market-specific insights, strategies and platform innovation for Hershey North America and Hershey International.
The primary chocolate and confectionery products we sell in the United States include the following:
Under the HERSHEY’S brand franchise:
HERSHEY’S milk chocolate bar
HERSHEY’S BLISS chocolates
HERSHEY’S milk chocolate bar with almonds
HERSHEY’S COOKIES ‘N’ CRÈME candy bar
HERSHEY’S Extra Dark chocolates
HERSHEY’S POT OF GOLD boxed chocolates
HERSHEY’S MINIATURES chocolate candy
HERSHEY’S SUGAR FREE chocolate candy
HERSHEY’S NUGGETS chocolates
HERSHEY’S HUGS candies
HERSHEY’S STICKS chocolates
Under the REESE’S brand franchise:
REESE’S peanut butter cups
REESE’S SUGAR FREE peanut butter cups
REESE’S PIECES candy
REESE’S crispy crunchy bar
REESE’S BIG CUP peanut butter cups
REESE’S WHIPPS nougat bar
REESE’S NUTRAGEOUS candy bar
REESESTICKS wafer bars
REESE’S Clusters candy
FAST BREAK candy bar
Under the KISSES brand franchise:
HERSHEY’S KISSES brand milk chocolates
HERSHEY’S KISSES brand milk chocolates
HERSHEY’S KISSES brand milk chocolates with cherry cordial crème with almonds
HERSHEY’S KISSES brand milk chocolates
HERSHEY’S KISSES brand chocolate meltaway milk chocolates filled with caramel
Our other chocolate and confectionery products sold in the United States include the following:
5th AVENUE candy bar
ALMOND JOY candy bar
CARAMELLO candy bar
GOOD & PLENTY candy
HEATH toffee bar
JOLLY RANCHER candy
JOLLY RANCHER sugar free hard candy
KIT KAT wafer bar
MILK DUDS candy
MOUNDS candy bar
MR. GOODBAR candy bar
PAYDAY peanut caramel bar
ROLO caramels in milk chocolate
SKOR toffee bar
SPECIAL DARK chocolate bar
SYMPHONY milk chocolate bar
SYMPHONY milk chocolate bar with almonds and toffee
TAKE5 candy bar
WHATCHAMACALLIT candy bar
WHOPPERS malted milk balls
YORK peppermint pattie
YORK sugar free peppermint pattie
ZAGNUT candy bar
ZERO candy bar
We also sell products in the United States under the following product lines:
Artisan Confections Company, a wholly-owned subsidiary of The Hershey Company, markets SCHARFFEN BERGER high-cacao dark chocolate products, and DAGOBA natural and organic chocolate products. Our SCHARFFEN BERGER products include chocolate bars, tasting squares, home baking products and professional chocolate and cocoa items. DAGOBA products include chocolate bars, drinking chocolate and baking products.
Our snack products include HERSHEY’S SNACKSTERS snack mix; HERSHEY’S and REESE’S granola bars; REESE’S SNACK BARZ and MAUNA LOA macadamia snack nuts and cookies in several varieties.
Our line of refreshment products includes ICE BREAKERS mints and chewing gum, BREATH SAVERS mints, BUBBLE YUM bubble gum and YORK mints.
Pantry items include HERSHEY’S, REESE’S, HEATH, and SCHARFFEN BERGER baking products. Our toppings and sundae syrups include REESE’S, HEATH and HERSHEY’S. We sell hot cocoa mix under the HERSHEY’S, HERSHEY’S GOODNIGHT HUGS and HERSHEY’S GOODNIGHT KISSES brand names.
Principal products we sell in Canada are HERSHEY’S milk chocolate bars and milk chocolate bars with almonds; OH HENRY! candy bars; REESE PEANUT BUTTER CUPS candy; HERSHEY’S KISSES brand milk chocolates; TWIZZLERS candy; 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.
We manufacture, import, market, sell and distribute chocolate and confectionery products in Mexico, including HERSHEY’S, KISSES, JOLLY RANCHER, and PELÓN PELO RICO chocolate, confectionery and beverage items.
We manufacture, import and market chocolate and confectionery products in Brazil, including HERSHEY’S chocolate and confectionery items and IO-IO items.
We manufacture, market, sell and distribute confectionery, beverage and cooking oil products in India, including NUTRINE and GODREJ confectionery and beverage products.
As of December 31, 2009, we employed approximately 12,100 full-time and 1,600 part-time employees worldwide. Collective bargaining agreements covered approximately 5,000 employees for which agreements covering approximately 43% of these employees, primarily outside of the United States, will expire during 2010. We believe that our employee relations are good.