Hershey's Strategic Paper

When the large pods are harvested, they are picked green. The growers then go through an extensive process to develop the flavor and fragrance characteristic to vanilla. According to the article “Vanilla! It’s Everywhere!” written by Gail Kay Haines, “they [the pods] must be ‘killed’ in hot water, ‘sweated’ in the sun, dried in the shade, and ‘conditioned’ in a closed box until they turn brown”. Furthermore, the overall development of harvesting natural-grown vanilla and selling it to the market may take nearly five years. On the other hand, though, the creation of chocolate does not take nearly as long as vanilla. The article “The Sweet History of Chocolate” written by Christopher Klein stated that in 1828, a Dutch chemist by the name of Coenraad Johannes van Houten had constructed and invented the Cocoa Press which had the ability of creating chocolate efficient and definitely not a lengthy process like the creation of vanilla. To make the creamy ingredient, “the cocoa press could squeeze the fatty cocoa butter from roasted cacao beans, leaving behind a dry cake that could be pulverized into a fine powder that could be mixed with liquids and other ingredients, poured into molds and solidified into edible, easily digestible chocolate” (Klein). The modern way of growing and producing chocolate has made it affordable for everyone, while growing natural vanilla is considerably a much more expensive

The premium chocolate industry is a large market in the United States and continues to grow around 10% annually. It is also populated with very strong

There is a high bargaining power of suppliers because of the need of the key ingredients required for chocolate manufacturing and limited number of suppliers for this industry. Since cocoa trees require tropical climate, it forces the main producers in the west to import them from countries in West Africa or other hot places

While Europe and the United States account for most chocolate consumption, the confection is growing in popularity in Asia and market forecasts are optimistic about the prospects in China and India (Nieburg, 2013, para 9). According to the CNN Freedom Project, the chocolate industry rakes in $83 billion a year, surpassing the Gross Domestic Product of over a hundred nations (“Who consumes the most chocolate,” 2012, para 3).

We all encounter chocolate in our daily life, and whether we want to admit it or not, chocolate has been a major part of history, and it is still seen today.

Hershey concentrates on a variety of chocolate products ranging from powder form to an assortment of candy bars, including the famous Hershey Kiss®, to the wholesaling of large decadent chocolate products for other smaller chocolate candy manufacturers.

Candy is not yet a “mature” industry in the United States. The compound annual growth rate for candy in the past ten years has been close to 6% a year, a very solid gain in an industry that is supposedly mature. In fact, within the chocolate confectionery subcategory, the United States ranks 11th in the world in per capita consumption and fifth in the world in growth since 1980. Based on current demographics, many analysts believe that there will be further growth for confectioneries. A “baby-boomlet” is on the way, significantly increasing the teenage population. By the time the population bulge peaks in the year 2010, it will top the baby boom in the 1960s in both size and duration. According to government statistics, the percentage of children between the age of 5 and 14 will rise during the 1990s, increasing from 14.2 percent of the population in the 1990 to 14.5 percent in the year 2000. This trend will serve as a strong foundation for increasing consumption of confectionery products through the end of the century. Nevertheless, spending for food and drink as a percentage of all personal consumption is declining in the United States, and most manufacturers recognize that future opportunities lie in using profits from domestic

Because of the amount of substitutes on the market, the premium chocolate industry is also has a high level of competition engrained in it. Rival companies with similar products consistently offer an alternative for customers.

One important underlying driver of change in the chocolate industry is the large manufacturers lobbying to change the definition of the term "chocolate" under USFDA guidelines, if they are successful in doing this then this could potentially have a dramatic impact on the competitive environment, with lots of cheaper products

The premium chocolate market has been growing at 20% annually, showing that buyers are willing to pay more for a better tasting and better quality chocolate. The declining growth of the overall chocolate market and rapid growth of the premium chocolate market is positive for current producers of premium chocolates in that the decline

Born into a poor, lower-class family, Milton S. Hershey dropped out of school before reaching the fourth grade. He developed an interest in becoming a confectioner. He believed there would be great demand for affordable, mass-produced chocolate, and thus he built the Hershey Chocolate Company. Hershey’s is now the largest producer of quality chocolates in North America and a global leader in chocolate and sugar confectionery. Although he enjoyed making money, Milton S. Hershey was intent on using his vast fortune for philanthropic purposes. He decided to surround his enterprise with a model town and personally financed the building of roads, utilities,

As of October 2012, Andrea Torres, director of new product development at Montreaux Chocolate USA, needs to recommend whether or not the company should pursue a new product launch in the United States. The new product, a 70% cocoa dark chocolate with fruit product, has been tested because of “its heightened revenue potential, better alignment with health and wellness initiatives, and strong consumer acceptance of the proposition” (Quelch 7). This memo will address the

The social demand for chocolate varies for several reasons. One of which is a change in the level of the population. The population of the UK is aging, people are living longer and there are a lower percentage of children. This would indicate that although the population is increasing because of people living longer there are fewer children, which is the main consumer for the chocolate industry resulting in less demand for the product.

If you’re a chocolate lover, I bet you already know that cacao and cocoa are available in many forms in the market: powder, nibs, butter, chips, and chocolate bars (the list goes on, but I’m just naming a few of the most popular chocolate forms).

After a thorough analysis of Apollo Foods business situation, a decision plan regarding the launch of a new chocolate product for its new branch acquisition Montreaux Chocolate USA has become clear. This decision plan is based on the following key challenges and marketing issues that need to be addressed. These challenges and marketing issues can be best summed up by a decision on what brand the product will be home to, whom the product will be marketed to, the ingredients and formulation of the product, the packaging of the product, can the product perform well enough in a sales forecast plan to exceed a $30 million dollar hurdle rate, and finally to launch or to test market the product. After reviewing Apollo Food’s data, their market research findings, and sales forecasts. A decision plan that addresses all of the key issues and marketing points has been created and will be