The Hershey Company announced net sales of $1,377,380,000 for the fourth quarter of 2008, compared with $1,342,222,000 compared to 2007.  Net income for the quarter was $82,155,000, compared with $54,343,000 for 2007.  For the full year 2008, consolidated net sales were $5,132,768,000 compared with $4,946,716,000 in 2007, an increase of 3.8 percent.   Net income was $311,405,000, compared with $214,154,000 in 2007, a 31%.  Not shabby in this economy.  It seems financial troubles find solace in chocolate.

Profits are a nice thing for a company.  What is not nice is when they come at the expense of brand integrity.  Hershey is winding down its “Global Supply Chain Transformation program,” which aims to increase shareholder value rationalizing and restructuring various operations.  To date the company has spent over half a billion dollars on the program.  Buried in all this financial information lurks an inconvenient truth:

“During the fourth quarter of 2008, the scope of the Global Supply Chain Transformation program increased modestly to include the closure of two subscale manufacturing facilities of Artisan Confections Company, a wholly owned subsidiary, and consolidation of the associated production into existing U.S. facilities, along with rationalization of other select items.”

Hershey, the nation’s second-biggest candy maker, owns Artisan Confections Company, which in turns owns Dagoba, Joseph Schmidt, and Scharffen Berger chocolate companies.  Those two “subscale manufacturing facilities” are bay area chocolate companies Joseph Schmidt and Scharffen Berger. 150 people in the area will lose their jobs.

Continue Reading »