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The Hershey Company Company Analysis Essay


The brand to be examined in this essay is the Hershey Chocolate Company. This company, venerable by U.S. standards, was founded in the 1800s, and produces products are beloved and, now, iconic. If not wildly cutting-edge in its introduction of new items, this firm has on the other hand remained consistent in quality.

It is now a global confectionery business, and represents a consumer product that lies somewhere between a commodity staple and a luxury item. As such, it fills an important spot in a portfolio that aims to cover industry sectors. Its business performance has shown stability and generally positive trends, and thus represents a sound, albeit non-flashy, investment.

This brand is admirable to this consumer and scholar because it provides products that nearly everyone has enjoyed in one form or another. From little kids’ chocolate milk, to the Kisses that adults exchange on Valentine’s Day, Hershey’s products are ubiquitous. They are widely available, at an attainable price point, to virtually all US consumers. Their quality is predictable and satisfying, although other brands seem to have picked up the gourmet end of the market.

This particular scholar has enjoyed wonderful Hershey’s chocolate bars. They have been a pleasure as portable energy on trips, as shared pick-me-ups in between classes, and in the form of that odd American summer and outdoor dessert, s’mores. It has been reassuring to this student that the chocolate bars are readily available and reliable in taste. Hershey’s products have been an affordable little luxury.

The company’s founder, Milton Snaveley Hershey, was born in rural Pennsylvania, and grew up in a farming community about 1.5 hours from Philadelphia. His grandfather was a Mennonite minister, and his mother, who raised him largely by herself, conveyed a fierce work ethic. He worked in several candy businesses in several cities including Philadelphia, and New York.

He eventually settled in Lancaster County, founding the Lancaster Caramel Company. This location took advantage of the readily available butter and milk produced by the local dairy farmers on some of the nation’s richest grazing land. Caramels include a mere handful of ingredients, but depend for their taste on good ingredients and careful technique, which he emphasized.

He became aware of chocolate manufacturing equipment in the late 1800s, when chocolate was still a very high-end, luxury item (Biography.com, 2015). While attending the Columbia Exposition in 1893, he acquired specialized chocolate-making equipment, and used the use of milk in making coatings for his Lancaster caramels. The sale of excess chocolate formed the basis of a whole separate business, which was called the Hershey Chocolate Company, which eventually became the main business.

One thing that makes Hershey such an unusual firm is the way that its founder contributed so powerfully to the education, housing, and health of the community created by his factories. He founded a school, and eventually endowed it with the bulk of his fortune. Today, there is a school, a medical school, a resort, and a theme park, all carrying the Hershey name.

The product that Hershey began with was a chocolate bar. This eventually was followed by Hershey’s Kisses. During World War II, the emergency rations of US soldiers were augmented with chocolate bars, which solidified Hershey’s role as almost a staple of life, despite the unattractive, uncooked potato taste of that formulation (it was intended to discourage instant consumption) (Chocolate Exhibit, 2015).

Today the product line also includes Reese’s, Twizzlers, Mounds, York, and Kit Kat, as well as gum, cookies, nuts in small serving packs, and mints, as well as syrup, baking chocolate, and cocoa mix (the Hershey Ice Cream company is unrelated). Lancaster Caramel, the name of Milton Hershey’s original company, is being revived in a roll-out to both the US and China (Anderson, 2013). The firm has just expanded into the meat snack business under the name of ‘Krave’ (McGrath, 2015).

However, in general, Hershey has been sparing and conservative in the introduction of truly new items (as opposed to new shapes), for example, the fairly recent addition of Cookies and Cream. Other firms are attempting either exoticism (e.g., chocolate/pomegranate) or supposed Mayan authenticity (e.g., purity of cacao/combined with chili peppers) (Coe, 2006) .

This apparent slowness to be at the forefront of new product innovation may be seen by some as a drawback. Some scholars note that market pioneers can benefit for decades after the introduction of a novel product (Robinson, Kalyanaram, & Urban, 1994). However, Hershey has managed to succeed anyway.

Viewed exclusively as a corporation, Hershey’s appears to be a sound firm financially, ranking at 366th nationally amongst the S&P 500 and the Fortune 1000. Its stock price has increased at least six-fold over the last two decades. Its sales volume has more than doubled in the same time period (Morningstar, 2015).

It commands a 43 per cent share of the American market (Singh, 2013). Its main competitors include Mars, Inc., Nestlé S.A., and Mondelez, International, Inc., and it is arguably more recognizable as a brand name than any of these, certainly in the USA (The Hershey Compamy, 2015). After its merger with Reese’s, it has become stronger and, according to the Reese heirs, more competently managed (Singh, 2013).

Thus, this brand, which has become an American icon, offers a range of products, with the central and most recognizable ones being among this student’s personal favorites. The company has made their consistent taste and familiar format available across the country, and also has global reach.

Their product line includes a variety of other brands, and recent mergers and roll-outs promise to continue their long term success. Their financial numbers are sound, and managerial improvements suggest a bright future. This brand has a definite place in a diversified portfolio.

Reference List

Anderson, M. (2013). ‘Lancaster’ Soft Caramels, New Hershey Candy Brand, Hit Shelves 2014. Web.

Chocolate: The Exhibit. (2015). Academy of Natural Sciences. Web.

Coe, M. (2006). The True History of Chocolate. Web.

McGrath, M. (2015). : 120 Chocolate enters the meat snack business. Web.

. (2015). Biography. Web.

Robinson, W., Kalyanaram, G., & Urban, G. L. (1994). : A Survey of Empirical Evidence. Review of Industrial Organization, 9(1), 1-23. Web.

Singh, V. (2013). Why Hershey Looks Like a Sweet Investment. Web.

The Hershey Compamy. (2015). Web.

The Hershey Company. (2015). Web.

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IvyPanda. "The Hershey Company Company Analysis." May 2, 2020. https://ivypanda.com/essays/the-hershey-company-company-analysis/.

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IvyPanda. 2020. "The Hershey Company Company Analysis." May 2, 2020. https://ivypanda.com/essays/the-hershey-company-company-analysis/.

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IvyPanda. (2020) 'The Hershey Company Company Analysis'. 2 May.

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