Hershey Begins Move to Simple Ingredients, Reaffirms Outlook
19 Feb 2015 --- The Hershey Company claims it is demonstrating its dedication to goodness through its great-tasting, high-quality products by beginning a transition to simple and easy-to-understand ingredients. This builds and expands on Hershey’s ongoing commitment to responsibly sourcing the ingredients it uses in its product portfolio.
“As consumers, our relationship with food is changing. We spend more time talking and sharing with others about what we eat and why we like certain foods, than we spend actually eating. Food matters and at Hershey, we care deeply about it,” said John P. Bilbrey, President and Chief Executive Officer, The Hershey Company. “We all want and deserve to know what’s in our food. Hershey takes pride in listening to our consumers and customers and understanding what they need. We will continue to make our great-tasting, high-quality iconic brands that people know and love. We also will share more information about what goes into our products in ways that are easy to understand and access.”
Hershey is focusing on three key principles:
• Simple Ingredients: “We are committed to making our products using ingredients that are simple and easy-to-understand, like fresh milk from local farms, roasted California almonds, cocoa beans and sugar – ingredients you recognize, know and trust. We strive for this kind of simplicity with all of our ingredients.”
• Sharing What’s Inside: “We take pride in our products and sharing information about all that goes into them, from the ingredients to sourcing, manufacturing and labeling. We will make this information easy to find for those who are interested – whether that’s on our packaging, on our website or through new technologies.”
• Thoughtful and Responsible Sourcing of Ingredients: “We will continue to work with our suppliers to responsibly source sustainable ingredients, building on our progress against commitments to source 100 percent certified and sustainable cocoa and certified sustainable and traceable palm oil.”
“We will strive for simplicity with all of our ingredients, but we may not achieve it with every product,” said Bilbrey. “This is a journey and it will take time. We are equally committed to sharing what we achieve and what we don’t. For ingredients that may not be as simple, we will explain what they are and why we need them to provide the great flavors, aromas, textures and appearances that our consumers know and love.”
In 2015, Hershey plans to introduce in the U.S. new snacking products such as Brookside Dark Chocolate Fruit & Nut Bars, which will feature a lineup of simple ingredients, and transition some of its most popular chocolate brands, including Hershey’s Kisses Milk Chocolates and Hershey’s Milk Chocolate Bars to simpler ingredients.
The Hershey Company will continue updating its website to serve as a resource for information from a full ingredient glossary to in-depth articles about ingredients consumers want to know about and profiles of the suppliers we work with each and every day.
The news came as Hershey reaffirmed its full-year 2015 financial outlook previously provided on January 29, 2015. Specifically, the company estimates full-year 2015 net sales will increase 5.5 percent to 7.5 percent, including a net benefit from acquisitions and divestitures1 of about 2.5 points and unfavorable foreign currency exchange of approximately 1 point. The company expects that 2015 gross margin expansion of 135 to 145 basis points will contribute to an increase in adjusted earnings per share-diluted of 8 percent to 10 percent, including dilution from acquisitions and divestitures of $0.03 to $0.05 per share.
The company also announced that its Board of Directors has approved an additional $250 million stock repurchase authorization to repurchase shares of its Common Stock. Purchases under the new authorization will commence after the current program is completed. Hershey is authorized to purchase its outstanding shares in open market and privately negotiated transactions. The program has no expiration date and acquired shares of the Common Stock will be held as treasury shares. Similar to prior programs, approved share repurchase authorizations are in addition to Hershey’s practice of buying back shares sufficient to offset those issued under incentive compensation plans.
