A couple of days ago, the Financial Times reported that Hershey is the latest in of a long string of food processors that will divert an increasing amount of their financial resources in commodity market hedging against future price increases.
Mars to Sequence Cocoa Genome
The news outlets today were all in a tizzy about the announcement by Mars, the USDA and IBM of a five year project to sequence and analyze the cocoa genome. Many of these articles started out with the line “To save chocolate lovers from the agony of a potential candy bar shortage …” (Washington Post). Others, like Mars’ global director of plant science Shapiro, invoked the fate of the African cocoa farmers, claiming that the results of the project would bring economic stability to those farmers by making cocoa more pest and disease resistant. So it’s all about doing science in the name of the greater humanitarian good. Oh, and also to keep chocolate lovers happy. Continue reading “Mars to Sequence Cocoa Genome”
Hershey Net Profit Down 65%
These are bad days for Hershey. As Bloomberg reports, the company’s fourth quarter was dreadful. It lost market share to Mars and faces higher cocoa and milk prices. The forecast for 2008 is not promising either.I’ve always wondered about the appeal of the Hershey bar. Growing up in Germany, I did not know about the Hershey bar until I read Jack Kerouac’s The Dharma Bums. That created an almost mythical idea in my mind. Imagine my disappointment when I first tasted one. It was such a let down. Compared to Milka, Sarotti, Ritter Sport, the Hershey bar tasted gritty and waxy. Not enough conching, not enough cocoa and cocoa butter.
When the dark chocolate craze hit in 2000, Hershey tried to reposition itself and create fancy chocolate bars with made from single origin cocoa beans – Hershey’s Cacao Reserve. The packaging and the wording are fancy but the chocolate does not taste any better. The 35% milk tastes sticky and sour while the 65% has no subtlety at all. As U.S. chocolate tastes mature, Hershey seems behind the time. One can barely imagine how bad it will taste once they are permitted to substitute vegetable fat for cocoa butter.No wonder, then, that the company performs poorly.
