Hershey announced a layoff because it costs more to make their chocolates, and fewer people are buying them. Around 5% of Hershey’s workers will lose their jobs, which might cost the company about $60 million. Let’s learn more about Hershey’s layoff and the reason behind this change!
They want to save money over a few years because they’re selling less candy, and the things they need to make it, like cocoa and sugar, cost more now. Hershey hopes this plan will save them between $200 million and $250 million by 2026. The company has sold less chocolate lately. Also, they think it’s because the ingredients, like cocoa, are more expensive. In the last part of the year, their sales decreased by 6.6%.
What Type Of Company Is Hershey?
Hershey is a big company that makes yummy chocolates and fun treats. It’s in Hershey, Pennsylvania, where you can also find Hersheypark and Hershey’s Chocolate World, a cool chocolate place.
What Is Hershey’s History?
Hershey was started in 1894 by a person named Milton S. Hershey. He had a candy shop before, but it didn’t work out. After trying in different cities, and returned to Pennsylvania in 1883 and started the Lancaster Caramel Company. In 1899, he sold it for a million dollars (which is a lot!) and focused on making chocolate.
Milton Hershey made a unique way to make chocolate. In 1900, he started making Hershey’s Milk Chocolate bars. People liked them, and the company grew. He also made a small, sweet candy called Hershey’s Kiss in 1907, which became very popular.
Over the years, they introduced more tasty products like Mr. Goodbar with peanuts, Hershey’s Syrup, and chocolate chips for baking. They even make Reese’s Peanut Butter Cups, their top-selling candy.
Hershey faced challenges, like labour strikes in the late 1930s, but it kept growing. In the 1970s, they bought Twizzler liquorice candies. In the 1980s, they got the rights to make Kit Kat and Rolo in the United States.
Recently, Hershey made some exciting moves. They bought companies like Scharffen Berger Chocolate Maker, Krave Jerky, and Amplify Snack Brands. They also expanded beyond chocolates by acquiring companies like One Brands (protein bars), Lily’s (for plant-based snacks), and Dot’s Pretzels.
In 2023, Hershey tried plant-based chocolates made without dairy. Now, they’re exploring new things to keep making tasty treats people love.
What Challenges Are Hershey Facing and How Are They Handling Them?
Hershey is facing some problems right now:
Cocoa Prices Going Up:
The stuff they use to make chocolate and cocoa is becoming very expensive. It is because the weather in West Africa, where they get a lot of cocoa, has been dry. The cost of cocoa is so high that Hershey might have to make their chocolates more expensive.
Changes in the Company:
To deal with the high costs, Hershey is making some significant changes. They plan to save $300 million annually for the next two years. This means some people working for Hershey might lose their jobs, but they say it will be less than 5% of their employees worldwide.
Not Enough Chocolates:
Hershey is warning that there might need to be more of their chocolates in the stores. It is because they need help making and delivering their chocolates. So, you might need help finding your favourite Hershey’s treats.
Concerns About Doing Good:
Some say that Hershey needs to do more to ensure the cocoa they use comes from places where people are treated well. There are worries about child labour in the cocoa industry. Also, Hershey has been criticized for failing to do things correctly.
Even though Hershey has these problems, they are still a big name in the chocolate world. They make famous things like Reese’s Peanut Butter Cups. Hershey is trying to figure out how to deal with these issues and still make good chocolate that people love.
Is Hershey’s Chocolate Vegan?
The Hershey Company offers a mix of vegan and non-vegan products. But its most familiar chocolate bar is made from milk chocolate, which is not vegan. The classic Hershey’s Milk Chocolate Bar contains sugar, chocolate, cocoa butter, milk fat, and soy lecithin.
While Hershey’s has some products that could fit into a vegan diet, not all Hershey’s chocolates can be considered entirely vegan.
Is Hershey’s Chocolate Cruelty-Free?
Unfortunately, Hershey’s chocolate is not cruelty-free. The milk chocolate variety contains sugar and soy lecithin produced with genetically modified ingredients tested on animals. Additionally, the dairy industry involves practices that aren’t cruelty-free.
What About Hershey’s Cocoa Powder?
Hershey’s Cocoa Powder, on the other hand, is made from a single ingredient (cocoa) and has no animal sources. So it is suitable for vegans.
In summary, while Hershey’s offers some vegan-friendly options (such as specific chocolate chips), their mainstream milk chocolate bars are not vegan. If you’re looking for genuinely vegan chocolate, consider exploring other brands specializing in dairy-free alternatives!
What Are Some Of The Most Popular Products Made By Hershey?
Hershey makes super yummy chocolates that lots of people love. Here are some of their most famous ones:
Reese’s Peanut Butter Cups:
These are special cups with tasty peanut butter and delicious milk chocolate outside. People enjoy the mix of sweet and salty flavours.
Hershey’s Milk Chocolate Bar:
This is a classic favourite! It’s a simple but delightful chocolate bar with creamy milk chocolate. People have been enjoying it for a long time.
Hershey doesn’t initially make Kit Kat, but they make it in the United States. Kit Kat is a crispy wafer covered in yummy milk chocolate. It’s hard to resist!
These chocolates are small and look like little kisses. They’re great for sharing or just enjoying by yourself.
Almond Joy and Mounds:
Almond Joy has coconut, almonds, and milk chocolate, while Mounds is all about coconut and dark chocolate. Both are delicious!
York Peppermint Patties:
These have a refreshing peppermint filling covered in dark chocolate. Perfect for those who like a minty twist to their chocolate.
What Are Hershey’s Plans For The Future?
Now, when they look at the following year, they think they will sell only a bit more chocolate, maybe 2% to 3% more. This is less than some people thought it would be, around 3.4%.
Halloween could have been better for Hershey, too. They increased their prices a lot during Halloween, more than usual. This is because the stuff they need to make chocolate costs more, like cocoa and sugar. Cocoa, for example, is now 65% more expensive than last year.
Inflation is making things more expensive for everyone, and Hershey feels it, too. Inflation means the prices of items go up. People might not buy as much chocolate because it’s getting more expensive.
The people who decide about money in the country, called the Federal Reserve, didn’t change the interest rates. Interest rates are like the price of money. Some thought they might make it cheaper, but they didn’t. This might affect how much people spend.
Hershey is saying that despite facing problems, they have plans to make things better in the future. They believe they can still grow and sell more chocolate.
Who Is Hershey’s Biggest Competitor?
Hershey has some competitors in the chocolate industry:
- Who They Are: Nestle is a giant in making yummy food and drinks worldwide.
- What They Make: They create lots of stuff, including chocolates that might give Hershey a run for its money.
- Who They Are: Mars is like a chocolate superhero with famous treats like M&M’s, Snickers, and Milky Way.
- What They Make: Imagine colourful M&Ms and tasty candy bars – Mars’s speciality.
- Who They Are: Mondelez is like a snack magician with a bag full of treats, including Cadbury, Oreo, and Toblerone.
- What They Make: From smooth Cadbury chocolate to crunchy Toblerone, Mondelez knows how to make snack time awesome.
Lindt & Sprungli:
- Who They Are: Lindt & Sprüngli is like the fancy friend who brings the most delicious chocolates to the party.
- What They Make: If you’re into top-notch chocolates, Lindt & Sprüngli has your back with their premium chocolate goodies.
- Who They Are: Pladis is in the confectionery gang, aiming to delight your taste buds.
- What They Make: Pladis joins the snack fun with various sweet treats that keep things exciting.
These companies all create fantastic snacks that make the snack world a happy and tasty place. Whether you love chocolate bars, cookies, or other sweet surprises, these competitors make sure there’s always something delicious for everyone!
The Bottom Line
Hershey announced layoffs recently because things have been tough for the chocolate company. They’re facing money issues, and the stuff they use to make chocolate, like cocoa, is getting more expensive. To deal with this, Hershey made a plan to save money. The goal is to save $300 million yearly, but it won’t affect many of Hershey’s workers, just a tiny part of the big Hershey family. Even though Hershey is going through some tough times, they’re staying positive. They have plans to grow and get through these challenges. This shows that significant changes are happening in the business world, and companies must prepare for them.