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• Milton Hershey was born in 1857 and spent his youth primarily in New
Orleans and New York but returned to Pennsylvania and formed the
Hershey Chocolate Company in 1894.
• Hershey foods were founded in 1905 and went public in 1927. The
company can be classified into 3 primary product groups: the chocolate
and confectionary group, restaurant operations and other food products
and the services group.
• The chocolate and confectionary group is the most well known of the three
and offers products such as Kisses, Kit Kats, Tweezers, Ice Breakers and
the Bliss Chocolate.
• Today, the company is a leading snack food company and the largest
American manufacturer of Chocolate and non chocolate confectionary
products.
• Richard Lenny became CEO of Hershey foods in 2001 and with this post
also became the first outsider to ever run the company.
• The Hershey Trust company began in 1905 as the community’s first bank.
A few years later the company was re-established as the Hershey
Industrial School.
• The biggest challenge for the company arose when Milton Hershey
invested his entire $60 billion into the company.
• In 1909, The Milton Hershey School was founded for orphaned boys with a
view of training young boys for various occupations and a bright future.
Soon, admissions were open to various minorities and girls as well.
• The school is located on 10000 acre campus and has modern facilities that
enable the underprivileged to have equal opportunities and currently
houses around 1200 students.
• With the death of Milton Hershey in 1945 began the issues within the
company.
• In 2002, the trust voted 15-2 to diversify its portfolio by selling Hershey
Foods Corporation
• Even though Richard Lenny was initially against making selling the
company, he was forced into it by Trust CEO Vowler.
• In July 2002, the company announced publicly its desire to put Hershey
Food Corporations up for sale.
• There were protests at the grass root levels which included an online
petition and a union organised protest.
• Bidding for the company began in August 2002 and left Hershey’s with
two options
• Nestle and Cadbury Schweppes formed the first of the parties and the
second was Wrigley’s Jr, Company
• The latter was accepted and the $12.5 billion bid was a combination of
cash and stock for a new company to be known as Wrigley Hershey
• Suddenly, mid September the Hershey board had a change of heart and
decided to reject all bids.
• Markets reacted terribly to this piece of news since share prices were
down to their lowest in 15 years.
• Richard Lenny made an announcement stating that Hershey Food
Corporations was, as always, going to continue to build its brand and
capitalise on its strengths.
• Lenny as CEO of Hershey Food Corporations must try and reassure the
citizens of Hershey that the indecisive nature of the company that was
seen during the sale process would not be seen again.
• Efforts must also be made to ensure that conflict within the company is
managed in a civil and quiet manner and not exposed to the public.
• Hershey Foods must make its intentions of recapturing the market very
clear to not only the public but more importantly the investors as the
latter will be very sceptical about investing in the company that suffered
such great losses.
• If Wrigley’s had indeed taken over Hershey’s, it is possible that they would
have run the company and taken it to great heights by increasing
productivity with modern technology. It is also possible that the fissures
that had begun to develop with the death of Milton Hershey would have
dissolved
• The withdrawal of the sale was favoured since Milton Hershey’s company
is in its intended location with his dreams being carried out by the citizens
of Hershey itself. It is also having been favourable to the citizens and
alumni since they are still the original chocolate capital of the world. There
is no unemployment and discontent among the citizens of Hershey.