Candy Blog Talk

I have heard rumors that more hershey’s chocolates will be manufactured in Mexico.  Specifically chocolates that merchandizers like to call “3rd tier chocolates”; i.e. Payday, Fast Break, and Score bars.  Anyone have any validation or discredit to this rumor?

I also heard that Hershey’s will be taking premium brands out of drug stores? Are they not selling?  No more Bliss or Dagoba in my local Rite Aid? What is this?

I can confirm that at least some of the non-branded candies are being made in Mexico such as 5th Avenue and York Peppermint Patties. The Reese’s Signature line (the caramel clusters) are also made in Mexico.

I fully expect that all sugar confectionery to be made in Mexico as well (Jolly Ranchers & Twizzlers) as the biggest cost savings can be made with reference to the sugar tariffs.

I haven’t seen any word on the Dagoba or Bliss activity, but I’ll see what I can find out. I know that Hershey’s does exclusives with Target & WalMart for some of its flavors of its major product lines, perhaps this is a new permutation of that. (Though I can’t imagine why they wouldn’t want Bliss to completely saturate the market and be every Dove is.)

Correct me if I have this wrong, but Hershey’s has been outsourcing a good deal of their candy making to Mexico, I’m guessing to save money on production costs, but last summer they raised prices by 11% in order to…what? Make even more of a profit? I could have sworn that I read somewhere that part of the reason for the cost increase had to do with the fact the production was costing Hershey’s more than it used to. So in other words, they outsource to Mexico, probably causing a lot of employees in America to lose jobs, and now because it is probably costing them more to ship it back to the U.S, they raised the price of the candy. Do I have this right? And on top of all this, they’ve also started replacing some ingredients in certain products with a cheaper inferior alternative so that they can increase their profits even more?

If I have any of this wrong, please correct me. Am I the only who thinks Milton Hershey must be rolling over in his grave at this turn of events, with a company he started with the idea to bring the best chocolate to the public at an affordable price.  I know for me it has affected the way I spend my money on my candy supply. Out of my whole Easter stash, (and it is HUGE), I think I only have 2 or 3 things that came from Hershey’s.

The plants in Mexico are helping to supplement the production of products the plants in Hershey can’t produce fast enough. Keep in mind those plants in Hershey are OLD! The plants in Mexico also enable Hershey to grow the products in South America where Hershey products are not as available. Mars has factories in Canada does that make a difference?

As for the price increase of 11% last year, Hershey got the press coverage but Mars and Nestle increased their price 11% the next day and nobody mentioned it.

Also keep in mind that Hershey profits go to The Milton Hershey School.  Orphaned and under privileged children (and sometimes the parents) are schooled, housed, clothed etc. for free kindergarten through high school plus $80K for an under graduate degree at any college of their choice. That is what Milton Hershey thought was one of the most important things he did with his life.

As for the price increase of 11% last year, Hershey got the press coverage but Mars and Nestle increased their price 11% the next day and nobody mentioned it.

It was mentioned. I was aware of it, I know a lot of other folks knew about it. Big difference is that Mars is privately held and Hershey’s is openly traded on the American stock exchange, so the news means something to more than consumers - it means something to investors.

Hershey’s bar prices have been a known “index” about the general state of the economy.

Also keep in mind that Hershey profits go to The Milton Hershey School.  Orphaned and under privileged children (and sometimes the parents) are schooled, housed, clothed etc. for free kindergarten through high school plus $80K for an under graduate degree at any college of their choice. That is what Milton Hershey thought was one of the most important things he did with his life.

A slight correction - the Trust is a major holder of Hershey’s stock ... but certainly not the only one, just the one that guides the company. A good amount of those profits go to those who own stock.

http://finance.yahoo.com/q/mh?s=HSY

In my opinion the Trust should be more involved in guiding the company as a member of the community in order to keep the community whole and successful. Milton Hershey created jobs during the depression - his own WPA to keep people working, not because he needed a hockey stadium (or any of the other projects), but because it made sense to him to create something for the community by the community. They’re not teaching those kids a thing about becoming productive members of society if they’re teaching them about how a company town can make or break a community.

sdswcu - besides the Wrigley owned facilities, which Canadian Mars candy factories make candy for sale in the US?

Grace - Hershey often spoke about how the best advertising for any product is the quality of the product itself. A new article that came out showed a relationship between Hershey’s profits in the first quarter and their new push in advertising. (And my guess is the money they’re saving buy changing the size of their products/changing to cheaper ingredients. They need to advertise because the quality isn’t selling it on its own.)

http://adage.com/article?article_id=136235

Forgive me, but I don’t think I said ALL profits go to the Hershey school.

Hershey employees receive stock and can buy stock and it’s matched. Like any other public company, you can buy stock too.

You may have known the other candy companies increased their prices but the major news agencies didn’t do special news stories about Mars or Nestle, so Hershey gets all the negative press. If someone is going to “go after” companies for raising prices, then know the facts about all their competitors too.
Hershey also gives the stores credit for inventory that doesn’t sell and doesn’t leave them with nothing to show for products that are out of date or damaged.

I don’t know specifically which products Mars produces in the factories. Once again I think it’s just a point of Hershey isn’t the only one with factories outside the US borders and doesn’t deserve to be singled out as the only bad guy.

The economy is affecting everyone. The candy business as a whole is doing well but to keep prices low every company is looking at various options and not one will get through this without making someone mad or disappointed.

sdswcu - 27 April 2009 07:54 PM

Forgive me, but I don’t think I said ALL profits go to the Hershey school.

I didn’t say you did, I was just giving some more info, because as a local in Pennsylvania growing up I didn’t realize how little they owned as a whole. Their influence sometimes feels disproportionate.

I don’t know specifically which products Mars produces in the factories. Once again I think it’s just a point of Hershey isn’t the only one with factories outside the US borders and doesn’t deserve to be singled out as the only bad guy.

The economy is affecting everyone. The candy business as a whole is doing well but to keep prices low every company is looking at various options and not one will get through this without making someone mad or disappointed.

I think what makes many folks mad is that Hershey’s specifically said that they weren’t going to move production to Mexico ... and then did. (Let’s not even talk about the whole outsourcing their chocolate liquor manufacturing, they’re not even bean to bar now.)

What makes folks mad is that they bought Scharffen Berger and said they were going to continue running it like it was ... then closed down the Emeryville factory (which I admit was for show even back when Hershey’s bought it - but still, they moved their presence out of the Bay Area). They bought Joseph Schmidt and are now completely closing the company this June. They abandoned the entire communities of Smith Falls, Ontario and Oakdale, CA. (The Oakdale factory was not OLD, as I believe the ones that made Mounds/Almond Joy & Fifth Avenue were. The Hershey’s factory in Hershey is old and outdated.)

They keep saying that 90% of their chocolate candy is still chocolate but refuse (after many requests from me via various channels) to say exactly which products count within this 90%.

The media is able report on Hershey’s because they’re publicly held and they have to make a good amount of information public. Mars has the ability to do a lot of stuff outside of the scrutiny of public. but Hershey’s also capitalizes on that ... so if they want to talk about being an icon, they have to accept the responsibilities that come with that. Personally, I think their PR management has been deplorable.

I don’t mind price increases. Things get more expensive. I think we all understand that. I don’t mind packages getting smaller either. I don’t like it when something that I already loved and supported changes so much that it doesn’t matter what I spend of the size of the package I purchase ... I simply can’t even buy it any longer because they don’t make it. It might exist as a name, but the ingredients & style isn’t the same. (For the record it’s not just Hershey’s - Mars tried this with their Snickers Almond - they put some peanuts in there instead of almonds and immediately heard the backlash and went back to the earlier formula.)

The article I linked to before seems to indicate that the company is willing to support its products through contests, marketing tie ins, advertising and in-store displays, but not with keeping consumers satisfied with a high quality product. Their CSRs spew out the same script no matter what the complaint.

I do agree that the information isn’t getting out there fairly, but I don’t know who has the ability to research which factories exist and what they make. I think the media could do a better job reporting what the economic forces are that make non-US factories so attractive. It’s not just cheaper labor, it’s the farm bill and the sugar subsidies that create inflated prices for sugar within our borders but put that sugar inside a wrapper and call it candy and suddenly it’s exempt from tariffs when imported.

I didn?t say you did, I was just giving some more info, because as a local in Pennsylvania growing up I didn?t realize how little they owned as a whole. Their influence sometimes feels disproportionate.

The reason I mentioned the school at all is I’m fairly sure the vast majority of consumers have no idea the school exists and/or knows that Hershey does anything charitable.

They keep saying that 90% of their chocolate candy is still chocolate but refuse (after many requests from me via various channels) to say exactly which products count within this 90%.

Yeah, your guess is as good as mine. I know that Kisses and Hugs and Nuggets and the standard Hershey and Hershey w/almond are on that list. We were told that the only mocklate products were those where the chocolate itself was a supporting characteristic, i.e. Whatchamacallit. I believe if the public protested the change in Mr. Goodbar as passionately as they did when they attempted to change Almond Joy the company would go back to the real milk chocolate.  You probably know more about the time line with the Almond Joy change than I would, but I think they changed it back to milk chocolate pretty quick.

Personally, I think their PR management has been deplorable.

Amen.

The article I linked to before seems to indicate that the company is willing to support its products through contests, marketing tie ins, advertising and in-store displays, but not with keeping consumers satisfied with a high quality product. Their CSRs spew out the same script no matter what the complaint.

All they tell us is there has been very little negative reaction to the changes, so you knows as much or more than the rest of us.

You have to forgive me for jumping on the bandwagon, but it’s hard not take the negative posts personally because I want to think everyone has Hershey in their hearts. Every week we have voice mail incentive messages from a vice president who congratulates us for our efforts to grow the brand and keep our products fresh, etc. and for having Hershey in our Heart.

sdswcu - 27 April 2009 09:44 PM

All they tell us is there has been very little negative reaction to the changes,

That wounds me. I don’t think I could be more vocal ... and yet hear so little back.

I’m tough on Hershey’s because I want it to be good. I think everyone feels that way. I think that’s why it’s news. Because it’s so much a part of us.

In my heart of hearts, I want my experience with every candy to be good. They’re capable of it, I feel like they’re not very interested in it.

They want their workers to keep Hershey’s in their heart ... is there room in there for the customers?

Edited to add: I do think that you guys must be doing a good job on the freshness front. I really have never had a problem with old candy at any reputable seller. (99 Cent Store and that one Walgreen’s down the street from me that has some 3 Musketeers from summer 2007 on the shelf are another matter.)

You’d be surprised how much old candy is out there and we can’t find it all. There are more stores than you’d believe who don’t want us to come and check on things or offer suggestions. I think you’re most likely to find old candy at independent convenience stores, dollar stores and drug stores because they usually won’t let us come in and help. The little c-stores that buy from Sams or Costco can’t return out of date merchandise even if it was old when they bought it. I always tell them, knowledge is power and knowing how to read the date codes is imperative. When you see a news story about someone buying candy with bugs in it they are more times than not at a dollar store or small grocery. And of course, they never say the candy was too old because the store management won’t pull out of date products, they lay all the blame on the manufacturer. There is a c-store in my hometown with candy 3-4 years old that refuse to pull it because they haven’t made their profit from it yet.

That seems counterproductive to me…if that c-store happens to sell a stale/bugg infested candy bar…they wont make further profits as it will start to deter customers from purchasing there….So product movement in those retail outlets is really limited?  I am surprised and not surprised at the same time.  What about movement based on quality; are retailers more willing to move preimum brands to keep their quality intact..or less so because the profit is smaller on them if they have to get rid of them? How does this effect shelf space management?  Old vs. new…are some locations expanding displays in attempt for the old stuff to be more visible and thus sell?  Or do they literally jsut leave out all the old stuff and refuse to swap it out…if so, that is a bit scary!

Do manufacturers give retailers any incentives to get them to change out the old candy for the new to keep the quality perception of their brands?

Or do they literally just leave out all the old stuff and refuse to
swap it out…if so, that is a bit scary!

There is a select group of owners who will nod and say they understand the whole freshness scenario but have that warped mind set that if they don’t sell the entire box they haven’t made their profit. And yes, it’s very scary.

As for freshness incentives, Hershey will give credit for damaged or out of date candy as long as it’s purchased from a distributor that honors credit. Unfortunately there are distributors that look for stores that are willing to buy products really cheap and sell out of date merchandise and then refuse to take it back. And because not all companies will do a credit, when a store tells their distributor they have out of date candy they may just say sorry we can’t help.  I always tell the stores to specify that it’s Hershey and when I come back by the credit has usually been handled.

Best advice, go with your gut feeling. If the store looks dirty and run down, their merchandise is more than likely out of date.

I just wanted to add a comment to my original post. It’s not the fact that certain parts of production are being outsourced that bothers me, as much as the idea that Hershey’s hasn’t been completely forthcoming and honest in their dealings with the public. And while I agree that most of us realize that prices on products will increase, I continue to be amazed at the ever shrinking size of the candy that I’ve been paying more for. Does anyone remember the size that snack size (or fun bars) used to be? They used to be at least two bites worth of candy, now they’re only one bites worth.

I will admit however, that my negative opinion of Hershey’s right now is somewhat influenced by the inferior products that I’ve come across at our local Wal-mart. Lately it seems like more often than not, their candy supply has been on the stale side. Specifically their Hershey Plain bars. Admittedly, this may be more of a problem with Wal-mart than Hershey.  Although the expiration date on the chocolate was fine.

You?d be surprised how much old candy is out there and we can?t find it all. There are more stores than you?d believe who don?t want us to come and check on things or offer suggestions. I think you?re most likely to find old candy at independent convenience stores, dollar stores and drug stores because they usually won?t let us come in and help. The little c-stores that buy from Sams or Costco can?t return out of date merchandise even if it was old when they bought it. I always tell them, knowledge is power and knowing how to read the date codes is imperative

hah that reminds me
there is an independantly owned grocery store in the area
i love looking at candy so whenever im in a store i go down that aisle because there is always at least one or two things there that i dont see much anywhere else

at recently as last year i was in this store and walked down the candy aisle and saw there
http://www.carbwire.com/images/hershey-carb-alternatives.jpg
which have been discontinued for a while
so im pretty sure all of the bags they had on the shelf where outdated
i know how to read the code but i wasnt able to check these

maybe ill go there tomorrow and see if theyre still up

That’s what I’m searching for. Thanks so much for the information!!
simulation credit