Hershey Foods Corporation, its wholly-owned subsidiaries and entities in which
it has a controlling financial interest are engaged in the manufacture, distribution
and sale of confectionery and grocery products. The Company's principal product
groups include: confectionery products sold in the form of bar goods, bagged items
and boxed items; and grocery products in the form of baking ingredients, chocolate
drink mixes, peanut butter, dessert toppings and beverages.
The Company believes it is a leader in many of these product groups in the
United States, Canada and Mexico. Operating profit margins vary considerably
among individual products and brands. Generally, such margins on confectionery
products are greater than those on grocery products.
The Company manufactures confectionery products in a variety of packaged forms
and markets them under more than 50 brands. The different packaged forms include
various arrangements of the same bar products, such as boxes, trays and bags,
as well as a variety of different sizes and weights of the same bar products,
such as snack size, standard, king size, large and giant bars.
Among the principal confectionery products in the United States are: HERSHEY'S
COOKIES 'N' CREME candy bars, HERSHEY'S HUGS chocolates, HERSHEY'S KISSES chocolates,
HERSHEY'S KISSES chocolates with almonds, HERSHEY'S chocolate bars, HERSHEY'S
chocolate bars with almonds, HERSHEY'S MINIATURES chocolate bars, HERSHEY'S
NUGGETS chocolates, HERSHEY'S S'MORES candy bars, HERSHEY'S sugar free candies,
COOL BLAST mints, FAST BREAK candy bars, ICE BREAKERS mints and chewing gum,
JOLLY RANCHER candy, KIT KAT and KIT KAT BIG KAT wafer bars, KRACKEL chocolate
bars, MR.'GOODBAR chocolate bars, REESE'S NUTRAGEOUS candy bars, REESE'S peanut
butter cups, REESE'S PIECES candies, REESE'S sugar free peanut butter cups miniatures,
REESESTICKS wafer bars, SPECIAL DARK chocolate bars, SWOOPS chocolate slices
and SYMPHONY chocolate bars.
Other confectionery products include: HERSHEY'S BITES candies, ALMOND JOY candy
bars, BREATH SAVERS mints, BUBBLE YUM bubble gum, CARAMELLO candy bars, KOOLERZ
chewing gum, GOOD & PLENTY candy, HEATH toffee bars, MILK DUDS candy, MOUNDS
candy bars, PAYDAY candy bars, POT OF GOLD boxed chocolates, ROLO caramels in
milk chocolate, SKOR toffee bars, TWIZZLERS candy, WHATCHAMACALLIT candy bars,
WHOPPERS malted milk balls, YORK peppermint pattie candy, 5TH AVENUE candy bars
and ZERO candy bars.
The Company also manufactures and/or markets grocery products in the baking,
beverage, peanut butter and toppings categories. Principal products in the United
States include HERSHEY'S, REESE'S and HEATH baking pieces, HERSHEY'S chocolate
milk mix, HERSHEY'S cocoa, HERSHEY'S CHOCOLATE SHOPPE ice cream toppings, HERSHEY'S
HOT COCOA COLLECTION hot cocoa mix, HERSHEY'S syrup and REESE'S peanut butter.
HERSHEY'S chocolate and strawberry flavored milks are produced and sold under
license by various dairies throughout the United States, using milk mixes manufactured
by the Company. Baking and various other products are produced and sold under
the HERSHEY'S and REESE'S brand names by third parties that have been granted
licenses by the Company to use these trademarks.
Principal products in Canada include CHIPITS chocolate chips, GLOSETTE chocolate-covered
raisins, peanuts and almonds, OH'HENRY! candy bars, POT OF GOLD boxed chocolates,
REESE PEANUT BUTTER CUPS candy and TWIZZLERS candy. The Company also manufactures,
imports, markets, sells and distributes chocolate products in Mexico under the
HERSHEY'S brand name.
The Company has license agreements with several companies to manufacture and/or
sell products worldwide. Among the more significant are agreements with affiliated
companies of Cadbury Schweppes p.l.c. to manufacture and/or market and distribute
YORK, PETER PAUL ALMOND JOY and PETER PAUL MOUNDS confectionery products worldwide
as well as CADBURY and CARAMELLO confectionery products in the United States.
The Company's rights under these agreements are extendible on a long-term basis
at the Company's option.
The Company also has an agreement with Societe des Produits Nestle SA, which
licenses the Company to manufacture and distribute KIT KAT and ROLO confectionery
products in the United States. The Company's rights under this agreement are
extendible on a long-term basis at the Company's option, subject to certain
conditions, including minimum unit volume sales. The Company has an agreement
with an affiliate of Huhtam'ki Oy ('Huhtamaki') pursuant to which it licenses
the use of certain trademarks, including GOOD & PLENTY,HEATH, JOLLY RANCHER,
MILK DUDS, PAYDAY and'WHOPPERS for confectionery products worldwide. The Company's
rights under this agreement are extendible on a long-term basis at the Company's
option.
The Company's products are sold primarily to grocery wholesalers, chain grocery
stores, candy distributors, mass merchandisers, chain drug stores, vending companies,
wholesale clubs, convenience stores, concessionaires and food distributors by
full-time sales representatives, food brokers and part-time retail sales merchandisers
throughout the United States, Canada and Mexico. The Company believes its products
are sold in over 2'million retail outlets in North America, sales to McLane
Company, Inc., formerly a subsidiary of Wal-Mart Stores, Inc., amounted to approximately
22 percent of the Companys total sales.
Competition
Many of the Company's brands enjoy wide consumer acceptance and are among the
leading brands sold in the marketplace. However, these brands are sold in highly
competitive markets and compete with many other multinational, national, regional
and local firms, some of which have resources in excess of those available to
the Company.