In 1929, he had crafted a deal to merge his namesake chocolate empire with Kraft Phenix Cheese Corporation and Colgate-Palmolive-Peet company, but the plan was scuttled by the Great Depression.
The end of that story is often that chocolate got the town through the Great Depression, a savior to central Pennsylvania amid a country in its throes.
The postscript, though, is that concern has lingered since 1929. There have been three solutions: broaden the company’s size, its products or its global reach.
Efforts at the latter have been challenged. Hershey weighed teaming up with Italy’s Ferrero to buy England’s Cadbury in 2010, but the deal was too expensive. The push under J.P. Bilbrey, who joined Hershey armed with international experience from Procter & Gamble, was to once again look for growth globally.
His acquisition in 2014 of Shanghai Golden Monkey Food Joint Stock in China — meant to be its launching pad into the region — was a disappointment. The founder left early on and the chocolate market dipped.
Now, with the global confectionery market dominated by players like Nestle, Mars and Mondelez, it’s tough to cobble together an international platform. (The U.K. chip business Tyrrells that Hershey bought as part of Amplify is under review, Buck said.)
“We’ve identified the U.S. as our No. 1 priority,” said Buck. And in that, chocolate still gets top billing.
“There’s this pendulum that swings at Hershey,” noted the former Hershey employee.
Shortly after it announced its acquisition of Amplify, Hershey placed an even larger bid for Nestle’s U.S. candy business, which includes brands like Butterfinger.
“We look to strengthen our core business because it’s critically important to us. So, there may be some acquisitions that could create potential growth, but also provide a lot of cost synergies … and there will be others that might be more about revenue growth,” Buck said, not referring to the Nestle business directly.
But if Hershey isn’t careful, its rivals could outmaneuver it.