Hershey Meltdown Looms After Cadbury Clash With Trust

Hershey’s failure to find a way to combine with Cadbury --a traditional British company with a compatible culture -- is the story of two men who stood in each other’s way on the same side of the $19 billion takeover lost to Northfield, Illinois-based Kraft Foods Inc. Their rift, as recounted in interviews with more than a dozen executives, board members, and advisers who spoke on the condition of anonymity, shows how Hershey missed its last chance to attain Cadbury’s global scale, especially in the faster-growing emerging markets of Latin America and India.

Business Week

Cadbury Dismisses Bid From Kraft

Stepping up its efforts to fend off a hostile takeover bid, Cadbury increased its profitability target on Monday and said Kraft’s offer for the British chocolate and candy maker was “derisory.”

Cadbury declined to say whether it is in discussions with Hershey, Ferrero or any other potential rival bidders, but Todd Stitzer, the chief executive, said the company had “received indications of interest from third parties.”

New York Times

Hershey adding heat to Kraft's bid for Cadbury?

The Wall Street Journal, citing unnamed sources, reported Friday that the charitable trust that controls Hershey is pushing the Pennsylvania-based chocolate-maker to launch a $17 billion bid for Cadbury.

Last week, Kraft made a formal offer for Cadbury, reiterating its earlier $16 billion-plus bid for the company. Cadbury again decidedly rejected Kraft.

With Hershey seeming more likely to make an offer, a bidding war for Cadbury "is a definite possibility," said Erin Swanson, a stock analyst for Morningstar Inc.

Chicago Tribune

Hershey's 3rd-quarter profit rises 30%

Chocolate maker Hershey Co., helped by price increases and lower costs, reported Thursday that third-quarter profit rose 30% from last year and its raised its full-year profit outlook.

Marketwatch

Cadbury's Key Ingredient: Gum

"Gum is definitely one of the big factors behind this deal," says Lee Linthicum, the London-based head of global food research at Euromonitor. "It's not just buying a power brand in Cadbury—there's a lot more in Cadbury's portfolio that has real potential for innovation." Indeed, in her takeover proposition to Cadbury Chairman Roger Carr, Kraft CEO Irene Rosenfeld called the possible acquisition of the British candy company "a logical next step in our transformation as we shape the company into a more global, higher-growth, and higher-margin entity."

BusineesWeek

Hershey's Push Into High-End Chocolate Is Bittersweet

Bad timing contributes to Hershey's continued struggles to play in the premium chocolate segment:

Hershey said Thursday that it will no longer be marketing the Starbucks Corp. (SBUX) brand of premium chocolate and is also winding down its high-end Cacao Reserve line. Sales of pricier chocolate have slowed as consumers have tightened their belts and retailers have been reluctant to give up shelf space to lower- performing products.

Before the recession began, Hershey's sales suffered because consumers had been turning toward pricier chocolates, an area that Hershey had been slow to get into. Privately held Mars Inc. and specialty chocolate brands gained share. That pushed Hershey to begin marketing more expensive chocolates. In mid-2007 it announced a pact with Starbucks to develop and market a premium line.

But that new line was badly timed because the economy started slowing soon after. Consumers slashed spending last year and early this year, turning away from most extravagances, including pricey chocolate. "The timing of the launch of the Starbucks proposition, frankly, we just missed the window," said Hershey Chief Executive David West during a Thursday conference call. "Our partner obviously had some other business challenges and the consumer at that price point wasn't sustainable."

Money.CNN

Hershey kisses Web unit goodbye

Cue sadtrombone.com:

"Hershey's is making the strategic decision to exit the online retail business," said Hershey spokesman Kirk Saville. "The current business model is not sustainable."

Chicago Tribune

Please, Please Come Back

Check out this list of 19 Foods/Beverages that the AV Club wishes would come back on the market.

Gatorade Gum Or Cookies and Mint Hershey's anyone?

Candy Bar From Mars Aims For Women From Venus

The tag line on the package is "Naughty, but not that naughty." A TV spot starts with what looks like strangers having sex in a store dressing room. Currently the candy bar can be bought only California and online, but if all goes well, Mars is hoping women will be having Flings all across the country. But is this hyper-feminine, hyper-sexualized marketing coming on too strong?

"The overall campaign feels weird," Lisa Johnson says. "It feels creepy." Johnson is the co-author of Don't Think Pink: What Really Makes Women Buy — and How to Increase Your Share of This Crucial Market. She describes the marketing as a "full-frontal attack."

Oh my.

NPR

Hershey's Kisses "Off to Work We Go"

Something for the Ladies

New candy bar brand from Mars. Low-calorie chocolate bar named "Fling":

The candy is positioned as "Naughty, but not that naughty." In the first commercial that breaks next week from longtime roster shop BBDO, New York, a woman appears to enter a dressing room occupied by a man, with the two then getting undressed and proceeding to act, er, naughty. But then the camera pans over the top of the fitting rooms, revealing they are actually in two separate dressing rooms, as he struggles with his clothes and she secretly nibbles on a Fling.

How very Herbal circa 1998 of them.

Ad Age

Hershey Design Forum

Design inspires growth.

Celebrating the power of design at The Hershey Company with an all day event, including keynote speaker Robyn Waters (www.rwtrend.com), Ben Sauer from LPK, a workshop from the Stanford d.school and more.




Every expression leaves an impression...make each expression count.

Chocolate, Meet Choco-Luxe

But in their race to broaden the high-end market, the giants are competing with tech-savvy upstarts like Tcho and Amano. Founded by former nasa software developer Timothy Childs, Tcho brews limited-edition "beta" bars superb enough to extract $5 for a few bites. Childs classifies batches with wine descriptors like fruity, nutty and floral.

Time Magazine

Mars takes a bite out of chocolate giant Hershey

But M&M-making rival Mars has crept up on Hershey's dominance of U.S. chocolate buyers. And now, Mars has delivered a chocolate-coated slap in the face, setting up shop in south-central Pennsylvania, just 10 miles from Hershey's flagship factory on Chocolate Avenue.

msnbc.com

Wrigley shareholders approve $23B sale to Mars

The Mars-Wrigley deal has ignited a wave of speculation in recent months of further consolidation in the confectionary business. The most recent, which popped up this week in Britain's Daily Telegraph, has Nestle angling to buy a stake in Hershey Co., the big U.S. chocolate candy maker.

Chicago Tribune

Is Parting Sweet for Cadbury?

Logically, it made Cadbury and Hershey potential merger partners. Indeed, Cadbury has had on-and-off merger talks with Hershey for more than a decade and even teamed with Nestlé in a failed $10.5 billion bid for Hershey in 2002. The latest talks occurred in 2007 between Stitzer and then Hershey CEO Richard Lenny. But Lenny was ousted from Hershey in an ugly shake-up later in the year. Hershey continues to stumble--most recently when it raised prices 10% in response to rising costs, a move that hit its stock hard.

Time Magazine