This document is Hershey Foods Corporation's 2003 annual report and proxy statement to shareholders. It discusses Hershey's financial performance in 2003, including 13% earnings per share growth and continued margin expansion. It outlines the company's strategy of investing in core brands and expanding into snack market adjacencies. Key initiatives included restructuring the US sales force, creating a US Snack Group, and launching new better-for-you snack products. The report also discusses governance improvements and leadership changes on the board and in management.
Kraft Foods aims to position itself as a "global snacks powerhouse" through its growth strategy focused on high-margin categories like snacks and confectionary. It plans to launch Oreo biscuits in India as a test case for introducing core brands in emerging markets. For long-term success, Kraft must implement a marketing strategy in India that considers local tastes and prices, and manages the significant debt from its Cadbury acquisition through restructuring activities that avoid increasing long-term debt levels.
This is an example of an investment memo for a consumer products company, Kraft Heinz. This does not constitute investment advice and is an outdated valuation. This should only serve educational purposes.
Kraft Heinz is considering expanding into the frozen vegetables category in Eastern Europe. An analysis identified Hungary, the Czech Republic, and Slovakia as the most attractive target countries based on factors such as GDP, culture, and logistics. The frozen vegetables market is growing in all three countries. Kraft Heinz would face competition from companies like Bonduelle but could leverage its brand recognition. A marketing strategy was developed for each country focusing on distribution through supermarkets and a promotional mix including ads, consumer promotions, and digital marketing. Financial projections estimate $1.9 million in revenue in year 1, growing to $5.1 million by year 3, with total promotion costs of $1.05 million over 3 years.
Ice-Fili is a Russian ice cream company evaluating its business model and competitive positioning. It faces challenges from increased competition and a shifting target market. The company considers strategy options like differentiation, market penetration, product development, and cost leadership. Its operational marketing plan focuses on impulse and in-home consumption channels. It aims to drive summer season sales and loyalty through promotions, packaging, pricing in line with competitors, and developing core brands.
- The Sherwin-Williams Company reported a 1.4% increase in sales for the second quarter and first six months of 2008 compared to the same periods in 2007. Earnings per share decreased 4.6% for the quarter and 11.5% for the first six months.
- Sales increased for the Global Group but decreased for the Paint Stores Group and Consumer Group due to soft demand in the US housing and DIY markets. All segments faced rising costs that decreased profits.
- For the third quarter, Sherwin-Williams expects sales to be slightly below 2007 levels and earnings per share in the range of $1.20 to $1.45. For the full year, guidance was reaffirmed for
This document is a newsletter from Functional Foods Weekly dated February 22, 2010 that provides a summary of news and information related to the functional foods and nutraceuticals industry. The newsletter includes sections on business and market intelligence, consumer trends, market research reports, innovations, regulations, health research, reviews and opinions. Subscription information is also provided at the end.
- Krispy Kreme Doughnuts (KKD) began as a donut shop in 1937 and grew to become a publicly traded company. However, from 2000-2004, KKD's financial problems came to light as its accounting practices were called into question.
- KKD relied heavily on revenue from franchises and sales of equipment/ingredients to franchises. However, it was discovered that KKD improperly accounted for millions in expenses related to purchasing back franchises.
- By 2004, analysts decreased buy recommendations and increased sell recommendations as KKD's earnings were restated due to accounting issues. KKD faced SEC investigation and declining stock price.
Anheuser-Busch had a successful year in 2006. Consolidated net sales increased 4.5% to $15.7 billion and diluted earnings per share grew 13.5% to $2.53. Domestic beer shipments increased 1.2% and revenue per barrel was up 1.4%. International beer volume grew 9.3% and equity partner brands volume increased 19.7%. The packaging and entertainment segments also increased pretax profit. Anheuser-Busch remains focused on increasing domestic and international beer profitability, packaging and entertainment segment growth, and enhancing long-term shareholder value.
Kraft Foods aims to position itself as a "global snacks powerhouse" through its growth strategy focused on high-margin categories like snacks and confectionary. It plans to launch Oreo biscuits in India as a test case for introducing core brands in emerging markets. For long-term success, Kraft must implement a marketing strategy in India that considers local tastes and prices, and manages the significant debt from its Cadbury acquisition through restructuring activities that avoid increasing long-term debt levels.
This is an example of an investment memo for a consumer products company, Kraft Heinz. This does not constitute investment advice and is an outdated valuation. This should only serve educational purposes.
Kraft Heinz is considering expanding into the frozen vegetables category in Eastern Europe. An analysis identified Hungary, the Czech Republic, and Slovakia as the most attractive target countries based on factors such as GDP, culture, and logistics. The frozen vegetables market is growing in all three countries. Kraft Heinz would face competition from companies like Bonduelle but could leverage its brand recognition. A marketing strategy was developed for each country focusing on distribution through supermarkets and a promotional mix including ads, consumer promotions, and digital marketing. Financial projections estimate $1.9 million in revenue in year 1, growing to $5.1 million by year 3, with total promotion costs of $1.05 million over 3 years.
Ice-Fili is a Russian ice cream company evaluating its business model and competitive positioning. It faces challenges from increased competition and a shifting target market. The company considers strategy options like differentiation, market penetration, product development, and cost leadership. Its operational marketing plan focuses on impulse and in-home consumption channels. It aims to drive summer season sales and loyalty through promotions, packaging, pricing in line with competitors, and developing core brands.
- The Sherwin-Williams Company reported a 1.4% increase in sales for the second quarter and first six months of 2008 compared to the same periods in 2007. Earnings per share decreased 4.6% for the quarter and 11.5% for the first six months.
- Sales increased for the Global Group but decreased for the Paint Stores Group and Consumer Group due to soft demand in the US housing and DIY markets. All segments faced rising costs that decreased profits.
- For the third quarter, Sherwin-Williams expects sales to be slightly below 2007 levels and earnings per share in the range of $1.20 to $1.45. For the full year, guidance was reaffirmed for
This document is a newsletter from Functional Foods Weekly dated February 22, 2010 that provides a summary of news and information related to the functional foods and nutraceuticals industry. The newsletter includes sections on business and market intelligence, consumer trends, market research reports, innovations, regulations, health research, reviews and opinions. Subscription information is also provided at the end.
- Krispy Kreme Doughnuts (KKD) began as a donut shop in 1937 and grew to become a publicly traded company. However, from 2000-2004, KKD's financial problems came to light as its accounting practices were called into question.
- KKD relied heavily on revenue from franchises and sales of equipment/ingredients to franchises. However, it was discovered that KKD improperly accounted for millions in expenses related to purchasing back franchises.
- By 2004, analysts decreased buy recommendations and increased sell recommendations as KKD's earnings were restated due to accounting issues. KKD faced SEC investigation and declining stock price.
Anheuser-Busch had a successful year in 2006. Consolidated net sales increased 4.5% to $15.7 billion and diluted earnings per share grew 13.5% to $2.53. Domestic beer shipments increased 1.2% and revenue per barrel was up 1.4%. International beer volume grew 9.3% and equity partner brands volume increased 19.7%. The packaging and entertainment segments also increased pretax profit. Anheuser-Busch remains focused on increasing domestic and international beer profitability, packaging and entertainment segment growth, and enhancing long-term shareholder value.
The document outlines a strategy for an ice cream company that aims to:
1) Develop a new business model focused on impulse, home, artisanal, and export markets.
2) Optimize capacity utilization through proper product mix, operations, and technology.
3) Enter into joint ventures for technology, distribution, and management gains.
Grant Thornton - Food Snapshot Summer 2012Grant Thornton
Several large M&A transactions announced during the first half of 2012 indicate that the food and beverage industry is experiencing strong M&A activity. Driving this activity are challenges and competitive pressures that food and beverage executives face, including keeping up with healthier consumer lifestyles, assessing the impact of budget-conscious shoppers, and mitigating food safety concerns and their associated compliance costs. However, the ongoing burden of rising commodity prices is finally subsiding, giving way to profitability enhancements, including food and beverage companies outperforming 2007 public stock market levels.
Key findings in this report include:
•Reported deal value exceeded $6 billion during the first six months of 2012, a 30% increase over the same period last year.
•Wheat and corn prices declined 25% and 13% respectively, over last year’s prices.
•International average valuations have fallen during the past 12 months, in stark contrast to improving valuations in the United States.
•As coffee bean prices dropped 32% over the past 12 months in response to expectations of a robust harvest from Brazil, companies have reduced retail prices, although not to the same degree as input costs have fallen.
The document provides an overview of the key differences between US GAAP and IFRS accounting standards. Some of the main differences discussed include financial statement presentation requirements, consolidation approaches, business combination accounting, inventory valuation, impairment testing, financial instrument accounting, foreign currency translation, lease classification, income tax accounting, and revenue recognition. While convergence efforts have reduced many differences, the standards continue to have some divergent requirements.
Restaurant Brands International Buy RecommendationLucas Diniz
This document recommends buying stock in Restaurant Brands International (QSR), owner of Burger King and Tim Hortons fast food chains. Key points include:
- QSR is undervalued and has potential for growth through global expansion of Tim Hortons and Burger King brands under successful owners like Jorge Lemann.
- Lemann and 3G Capital have a track record of acquiring and growing food brands like Anheuser-Busch InBev. There is potential for them to acquire more brands.
- QSR has advantages like lower taxes from being based in Canada, experience with franchising models, and diversification across brands and markets.
CFA Institute Global Research Challenge 2014 - University of ScrantonJacqueline Hollawell
This document provides an analysis of J & J Snack Foods Corp (JJSF). It begins with a market profile and company highlights, including a buy recommendation and 21% price target upside. It then discusses JJSF's diverse product portfolio, experienced management, and competitive positioning in niche snack food markets. The analysis notes JJSF's defensive growth strategy and ability to combat competitive forces through market leadership. It also examines industry trends around health and nutrition. In conclusion, the document states JJSF's wide product availability and mix of impulse and deliberate purchases support ongoing strong sales growth.
The document provides a strategic plan for expanding the global operations of Grolsch, a subsidiary of SAB Miller. It analyzes Grolsch's current situation, issues, and options. It recommends entering new markets in South Africa, Brazil, and China using different entry strategies tailored for each market. For South Africa, it proposes utilizing SAB Miller's existing facilities and distribution channels. For Brazil, it recommends licensing production to a local company and providing promotional support. For China, it suggests leveraging SAB Miller's joint venture with a local brewer for distribution and promoting in high-quality locations. Financial projections through 2017 show increasing sales volumes and profits in each market, with the overall plan achieving a positive cumulative cash flow and
The document summarizes the ice cream industry in Russia from 1991-2002 and analyzes Ice Fili's position in the market. Key points include:
1) The Russian ice cream market saw increasing competition in the late 1990s as multinationals entered and regional producers grew aggressively.
2) Ice Fili faced challenges with maintaining margins around 15-20% and increasing efficiency as the market became more competitive.
3) While Ice Fili had recognizable brands, its branding efforts lagged behind multinationals, and it struggled with having too many product varieties.
Case analysis of Russian ice cream producer Ice-Fili in times of increasing competition. Made and presented for Rotman Commerce Consulting Case Competition 2010.
This presentation by Mondelēz International discusses the company's strategy and financial outlook. Some key points:
- Mondelēz aims to grow revenue at or above snack category growth rates through focusing on power brands and revenue management actions. It also aims to expand margins by reducing supply chain and overhead costs.
- In 2015, Mondelēz delivered organic net revenue growth of 1.4%, adjusted operating income margin expansion of 150 basis points, and adjusted EPS growth of 13.5% on a constant currency basis.
- For 2016, Mondelēz expects organic net revenue growth of at least 2%, adjusted operating income margin expansion to 15-16%, and double-digit
Krispy Kreme Doughnuts Inc. is analyzed in this report. The company operates doughnut shops and franchises around the world. A sell recommendation is issued with a target price of $12.65 due to high valuation multiples and risks from overexpansion. Krispy Kreme aims to have 1300 total stores by 2017 through domestic and international franchise growth. However, past overexpansion led to store closings and financial issues from 2004-2009. Moving forward, risks include cannibalism from too much growth and economic factors affecting global sales.
SABMiller plc is an international beverage and brewing company operating in over 80 countries. In 2016, the company had $5.8 billion in EBITA across its five regions - Latin America (33%), Africa (29%), Asia Pacific (13%), Europe (11%), and North America (14%). SABMiller has over 70,000 employees and produces over 200 beer brands, selling over 140,000 bottles of beer per minute. The company has leading market positions in many countries, with a focus on developing markets which make up 69% of its EBITA.
Dean Foods Imminent Margin Contraction Spawns Asymmetric Short OpportunityLester Goh
The document analyzes Dean Foods and argues it presents an opportunity for a short position. It asserts Dean's recent margin expansion is unsustainable as the drivers are temporary factors like low milk prices and cheap oil that are likely to mean revert. In the medium term, milk prices are expected to rise significantly due to higher feed costs, further pressuring margins. Downside risks of 50% are estimated if margins contract, costs are flat, and the valuation multiple declines.
Bloomin' Brands is recommended as a buy with an 11.85% upside potential. It has strong domestic and international growth prospects through its portfolio of restaurant brands like Outback Steakhouse. Domestically, sales and traffic continue to outperform peers. Internationally, the global casual dining market is growing faster than the US market, allowing for expansion opportunities. Improving margins through cost savings initiatives and strong operating cash flow provide additional upside to the stock.
1) Molson Coors is the 2nd largest manufacturer and distributor of beer in Canada, founded in 1786 in Montreal. It has experienced declining market share versus independent craft brewers.
2) A SWOT analysis identified opportunities in premium beers and new niche markets, but also weaknesses in lost first-mover advantage for craft beers and threats from new independent breweries.
3) The chosen alternative growth strategy is portfolio differentiation - developing new product lines to fill niche markets and gain first-mover advantage, focusing on moderate corporate growth through new markets.
Boston Beer Company (SAM) is recommended as a buy based on its position in the growing craft beer industry. SAM has successfully introduced new flavorful beer brands to the market, fueling revenue growth of 13.5% in 2015 and projected annual growth of 5.5% through 2020. This positions SAM well to benefit from industry expansion. Some risks include potential slowing of flagship brand sales growth and increased competition from spirits. Valuation models yield a target price of $218-$220, indicating 9% upside potential.
Boston Beer Company is facing challenges as the craft beer industry grows increasingly competitive. It is squeezed between large multinational breweries and small local breweries. While Boston Beer has strengths like its quality and brand recognition, it struggles with high competition and an inability to respond effectively. It should expand its successful Angry Orchard hard cider brand and acquire small craft breweries to gain market share. This will allow it to combat threats while leveraging opportunities in the changing beer industry environment.
SABMiller is the second largest beer company globally behind AB InBev. It faces intense competition from InBev as well as Heineken and Carlsberg. The beer industry is also impacted by consumer preferences, excise taxes, regulations, and health organizations. SABMiller has a history of acquisitions that has led to operations in 80 countries. Porter's Five Forces analysis identifies high competition and bargaining power of buyers as major issues. Recommendations include launching a new premium beer, offering local craft beers globally, and partnering with governments in developing markets to support infrastructure. These aim to attract customers with distinctive brands, expand margins, and ensure sustainable growth.
This is a brief review of Campbell soup's 10K. It is driven by questions to help you find the most important parts in a 10K report. All the questions are answered.
The document provides an outline and overview of legends and origins of healing ceremonies, specifically focusing on Eagle Dance ceremonies. It discusses legends of boys being abducted by eagles and learning songs and dances from birds. The document also examines variations in choreography and rituals between different Iroquois tribes for the Eagle Dance ceremony.
The document outlines a strategy for an ice cream company that aims to:
1) Develop a new business model focused on impulse, home, artisanal, and export markets.
2) Optimize capacity utilization through proper product mix, operations, and technology.
3) Enter into joint ventures for technology, distribution, and management gains.
Grant Thornton - Food Snapshot Summer 2012Grant Thornton
Several large M&A transactions announced during the first half of 2012 indicate that the food and beverage industry is experiencing strong M&A activity. Driving this activity are challenges and competitive pressures that food and beverage executives face, including keeping up with healthier consumer lifestyles, assessing the impact of budget-conscious shoppers, and mitigating food safety concerns and their associated compliance costs. However, the ongoing burden of rising commodity prices is finally subsiding, giving way to profitability enhancements, including food and beverage companies outperforming 2007 public stock market levels.
Key findings in this report include:
•Reported deal value exceeded $6 billion during the first six months of 2012, a 30% increase over the same period last year.
•Wheat and corn prices declined 25% and 13% respectively, over last year’s prices.
•International average valuations have fallen during the past 12 months, in stark contrast to improving valuations in the United States.
•As coffee bean prices dropped 32% over the past 12 months in response to expectations of a robust harvest from Brazil, companies have reduced retail prices, although not to the same degree as input costs have fallen.
The document provides an overview of the key differences between US GAAP and IFRS accounting standards. Some of the main differences discussed include financial statement presentation requirements, consolidation approaches, business combination accounting, inventory valuation, impairment testing, financial instrument accounting, foreign currency translation, lease classification, income tax accounting, and revenue recognition. While convergence efforts have reduced many differences, the standards continue to have some divergent requirements.
Restaurant Brands International Buy RecommendationLucas Diniz
This document recommends buying stock in Restaurant Brands International (QSR), owner of Burger King and Tim Hortons fast food chains. Key points include:
- QSR is undervalued and has potential for growth through global expansion of Tim Hortons and Burger King brands under successful owners like Jorge Lemann.
- Lemann and 3G Capital have a track record of acquiring and growing food brands like Anheuser-Busch InBev. There is potential for them to acquire more brands.
- QSR has advantages like lower taxes from being based in Canada, experience with franchising models, and diversification across brands and markets.
CFA Institute Global Research Challenge 2014 - University of ScrantonJacqueline Hollawell
This document provides an analysis of J & J Snack Foods Corp (JJSF). It begins with a market profile and company highlights, including a buy recommendation and 21% price target upside. It then discusses JJSF's diverse product portfolio, experienced management, and competitive positioning in niche snack food markets. The analysis notes JJSF's defensive growth strategy and ability to combat competitive forces through market leadership. It also examines industry trends around health and nutrition. In conclusion, the document states JJSF's wide product availability and mix of impulse and deliberate purchases support ongoing strong sales growth.
The document provides a strategic plan for expanding the global operations of Grolsch, a subsidiary of SAB Miller. It analyzes Grolsch's current situation, issues, and options. It recommends entering new markets in South Africa, Brazil, and China using different entry strategies tailored for each market. For South Africa, it proposes utilizing SAB Miller's existing facilities and distribution channels. For Brazil, it recommends licensing production to a local company and providing promotional support. For China, it suggests leveraging SAB Miller's joint venture with a local brewer for distribution and promoting in high-quality locations. Financial projections through 2017 show increasing sales volumes and profits in each market, with the overall plan achieving a positive cumulative cash flow and
The document summarizes the ice cream industry in Russia from 1991-2002 and analyzes Ice Fili's position in the market. Key points include:
1) The Russian ice cream market saw increasing competition in the late 1990s as multinationals entered and regional producers grew aggressively.
2) Ice Fili faced challenges with maintaining margins around 15-20% and increasing efficiency as the market became more competitive.
3) While Ice Fili had recognizable brands, its branding efforts lagged behind multinationals, and it struggled with having too many product varieties.
Case analysis of Russian ice cream producer Ice-Fili in times of increasing competition. Made and presented for Rotman Commerce Consulting Case Competition 2010.
This presentation by Mondelēz International discusses the company's strategy and financial outlook. Some key points:
- Mondelēz aims to grow revenue at or above snack category growth rates through focusing on power brands and revenue management actions. It also aims to expand margins by reducing supply chain and overhead costs.
- In 2015, Mondelēz delivered organic net revenue growth of 1.4%, adjusted operating income margin expansion of 150 basis points, and adjusted EPS growth of 13.5% on a constant currency basis.
- For 2016, Mondelēz expects organic net revenue growth of at least 2%, adjusted operating income margin expansion to 15-16%, and double-digit
Krispy Kreme Doughnuts Inc. is analyzed in this report. The company operates doughnut shops and franchises around the world. A sell recommendation is issued with a target price of $12.65 due to high valuation multiples and risks from overexpansion. Krispy Kreme aims to have 1300 total stores by 2017 through domestic and international franchise growth. However, past overexpansion led to store closings and financial issues from 2004-2009. Moving forward, risks include cannibalism from too much growth and economic factors affecting global sales.
SABMiller plc is an international beverage and brewing company operating in over 80 countries. In 2016, the company had $5.8 billion in EBITA across its five regions - Latin America (33%), Africa (29%), Asia Pacific (13%), Europe (11%), and North America (14%). SABMiller has over 70,000 employees and produces over 200 beer brands, selling over 140,000 bottles of beer per minute. The company has leading market positions in many countries, with a focus on developing markets which make up 69% of its EBITA.
Dean Foods Imminent Margin Contraction Spawns Asymmetric Short OpportunityLester Goh
The document analyzes Dean Foods and argues it presents an opportunity for a short position. It asserts Dean's recent margin expansion is unsustainable as the drivers are temporary factors like low milk prices and cheap oil that are likely to mean revert. In the medium term, milk prices are expected to rise significantly due to higher feed costs, further pressuring margins. Downside risks of 50% are estimated if margins contract, costs are flat, and the valuation multiple declines.
Bloomin' Brands is recommended as a buy with an 11.85% upside potential. It has strong domestic and international growth prospects through its portfolio of restaurant brands like Outback Steakhouse. Domestically, sales and traffic continue to outperform peers. Internationally, the global casual dining market is growing faster than the US market, allowing for expansion opportunities. Improving margins through cost savings initiatives and strong operating cash flow provide additional upside to the stock.
1) Molson Coors is the 2nd largest manufacturer and distributor of beer in Canada, founded in 1786 in Montreal. It has experienced declining market share versus independent craft brewers.
2) A SWOT analysis identified opportunities in premium beers and new niche markets, but also weaknesses in lost first-mover advantage for craft beers and threats from new independent breweries.
3) The chosen alternative growth strategy is portfolio differentiation - developing new product lines to fill niche markets and gain first-mover advantage, focusing on moderate corporate growth through new markets.
Boston Beer Company (SAM) is recommended as a buy based on its position in the growing craft beer industry. SAM has successfully introduced new flavorful beer brands to the market, fueling revenue growth of 13.5% in 2015 and projected annual growth of 5.5% through 2020. This positions SAM well to benefit from industry expansion. Some risks include potential slowing of flagship brand sales growth and increased competition from spirits. Valuation models yield a target price of $218-$220, indicating 9% upside potential.
Boston Beer Company is facing challenges as the craft beer industry grows increasingly competitive. It is squeezed between large multinational breweries and small local breweries. While Boston Beer has strengths like its quality and brand recognition, it struggles with high competition and an inability to respond effectively. It should expand its successful Angry Orchard hard cider brand and acquire small craft breweries to gain market share. This will allow it to combat threats while leveraging opportunities in the changing beer industry environment.
SABMiller is the second largest beer company globally behind AB InBev. It faces intense competition from InBev as well as Heineken and Carlsberg. The beer industry is also impacted by consumer preferences, excise taxes, regulations, and health organizations. SABMiller has a history of acquisitions that has led to operations in 80 countries. Porter's Five Forces analysis identifies high competition and bargaining power of buyers as major issues. Recommendations include launching a new premium beer, offering local craft beers globally, and partnering with governments in developing markets to support infrastructure. These aim to attract customers with distinctive brands, expand margins, and ensure sustainable growth.
This is a brief review of Campbell soup's 10K. It is driven by questions to help you find the most important parts in a 10K report. All the questions are answered.
The document provides an outline and overview of legends and origins of healing ceremonies, specifically focusing on Eagle Dance ceremonies. It discusses legends of boys being abducted by eagles and learning songs and dances from birds. The document also examines variations in choreography and rituals between different Iroquois tribes for the Eagle Dance ceremony.
This presentation document contains instructions for 3 slides, with the first two slides set to play automatically and the third slide only playing audio when clicked on by the presenter.
Credit information providers are developing new solutions like credit decision indices (CDI) to aggregate credit decisions and provide feedback. CDI provides a new dimension for decision-making by integrating risk perception across credit frameworks and industries. It represents useful data for both credit seekers and providers. CDI leverages existing risk management solutions that collect credit decisions to then aggregate decisions and compute rule-based indices. This closes the information loop and provides insights on approval and denial rates.
CVS had a very successful year in 2005, with sales increasing 21% to a record $37 billion and earnings per share climbing 32%. Same store sales grew 6.5% overall. CVS opened many new stores in important growth markets and expects to open 250-275 new stores in 2006. The acquisition of former Eckerd stores has met or exceeded expectations and provided opportunities to drive further growth. An upcoming acquisition of 700 Sav-on and Osco stores will strengthen CVS' position as the #1 retail pharmacy in the US. All signs point to continued growth and success for CVS in 2006 and beyond.
Running head IMPROVING FIRM BEHAVIOR THROUGH EMPLOYEE ENGAGEMENT .docxcowinhelen
Running head: IMPROVING FIRM BEHAVIOR THROUGH EMPLOYEE ENGAGEMENT 1
IMPROVING FIRM BEHAVIOR THROUGH EMPLOYEE ENGAGEMENT 19
Improving Firm Behavior through Employee Engagement
Name
Course Number
Professor
Date
Table of Contents
Overview of the organization3
My position and role within the organization6
Problem statement7
Research question9
Literature review9
Terminal course objectives15
Solution
s16
Reflection17
Overview of the organization
The corporate culture of Sobeys is clear with a focus on excellence in fresh food, a commitment to customer service, and highly engaged employees. Sobeys owns and operates more than 1,800 corporate and franchise locations in the Canadian Market. These stores are across all regions of Canada and include numerous banners such as Sobeys, Price Choppers, and Thrifty Foods to name a few. These different banners allow Sobeys to deliver different strategies of having the right products at the right prices determined by whom they compete with such as Wal-Mart as a discounter or Loblaw as a conventional grocery retailer. Sobeys owns 41.6 of Crombie REIT as of 2014, which allows Sobeys to have a strong partnership with a real estate company and continue to develop areas of expansion through capital growth by adding square footage sales. This paper will expand on further details of the real estate resources Sobeys has, what the firm’s plans are for future growth, and how Sobeys are maximizing their store formats to maintain and grow market share (Chevalier, 2015).
The main aim why individuals set up the business organization is to generate profits. Sobeys store has been able to conquer the market structure across Canada, and it can compete favorably with other stores including Walmart incorporations. Sobeys is the second largest food retailer in Canada having more than 260 supermarkets. The company is evolving occasionally as the technological landscape changes. Good management and the ability to retain customers has been one of the major focus of the Sobeys store and the secret of their success that spurns since the 20th century. The food industry is a very tricky industry to invest in, if the operations are not well connected, it can lead to massive losses. The regulations governing food industry are also many that the company is supposed to comply with. The authorities are very strict in implementing these regulations mainly because they have a direct impact on general human well-being.
Sobey's chain of stores is stocked with products that consumers easily relate to. The food industry is customer-based industry thus the need for customer feedback is very high. Without consumers, of course, the company will seize to exist. Ensuring customer satisfaction is one of the key priority of the Sobeys store. Customers always dictate what they want, and before opening a new store in a place, there is the need to conduct effective market analysis to ...
McKesson reported substantial progress in the past fiscal year by meeting key goals across its operations. In its supply management business, revenues grew 13% while operating margin improved 14 basis points. The information technology segment stabilized its customer and employee bases and saw its first year-over-year revenue gain in seven quarters. Looking ahead, McKesson is well positioned for continued growth due to positive industry fundamentals and its integrated solutions approach.
P&G's 2016 annual report provides financial highlights and discusses progress and challenges over the fiscal year. Net sales declined 8% to $65.3 billion due to divestitures and foreign exchange impacts, while core earnings per share declined slightly. The report discusses steps taken to streamline products, improve productivity and costs, and invest in growth. These include exiting unprofitable product lines, reducing overhead costs, and delivering over $10 billion in savings over 5 years. Progress was made in a difficult environment with foreign exchange headwinds, but more work is needed to strengthen growth and performance.
The one-year marketing plan summarizes Hershey's situation and recommendations. Hershey is the leading chocolate company in the US, but its market share is declining as competitor Mars increases its share. While chocolate sales are growing moderately, consumer preferences are shifting towards healthier and premium options. The plan recommends extending Hershey's Brookside brand with a new "Brookside Active" line of dark chocolate products targeting young, affluent consumers interested in health and wellness. The products would be promoted through TV, video, and social media using a penetration pricing strategy. The summary highlights Hershey's strengths and weaknesses compared to opportunities and threats in the current market environment.
United Stationers is focusing on six value drivers to achieve long-term financial goals: 1) Delivering profitable sales growth by leveraging product initiatives and serving new channels like e-tailers. 2) Driving out $100 million in costs over 5 years through waste elimination initiatives. 3) Expanding their private brand offerings which now generate 11% of sales. 4) Optimizing assets by improving working capital efficiency and leveraging IT infrastructure investments. 5) Unlocking value from their Sweet Paper acquisition by expanding product offerings and removing costs. 6) Using technology to enhance marketing capabilities and customer relationships.
United Stationers is focusing on six value drivers to achieve long-term financial goals: 1) Delivering profitable sales growth by leveraging product initiatives and serving new channels like e-tailers. 2) Driving out $100 million in costs over 5 years through waste elimination initiatives. 3) Expanding their private brand offerings which now generate 11% of sales. 4) Optimizing assets by improving working capital efficiency and leveraging IT infrastructure investments. 5) Unlocking value from their Sweet Paper acquisition by expanding product offerings and removing costs. 6) Using technology to enhance marketing capabilities and customer relationships.
The Campbell North America division had sales of $5.2 billion in fiscal 2004. Its portfolio includes leading brands like Campbell's, Pace, Prego, Swanson, Pepperidge Farm, and Godiva. The division sees opportunities to grow the U.S. soup business through convenient ready-to-serve soups and expanding production capacity. It will also continue investing in growth drivers like V8, Pepperidge Farm, Prego, Pace, and Godiva while supporting the core soup franchise.
Relatório anual 2012 (eng) melhor resolução (site)brpharma
Brasil Pharma is a leading pharmaceutical retailer in Brazil operating over 1,000 stores across five regional chains and a franchise system. In 2012, Brasil Pharma underwent a process of integrating its regional brands under a single national Brasil Pharma identity and culture. This included launching a new corporate brand and shared services center, restructuring the commercial department, and standardizing store operations. Brasil Pharma's goal is to be the best drugstore chain in Brazil by providing health and well-being to customers, long-term partnerships with suppliers, a good working environment for employees, and profitability for shareholders.
The Hershey Company is a leading North American chocolate manufacturer with over $16 billion in market capitalization and a 43% share of the domestic chocolate market. It offers products under 80 brands, including Hershey's, Reese's, and Twizzlers. While commodity price volatility presents risks, Hershey has effectively hedged cocoa prices and generates higher returns than competitors. The company also faces risks from foreign currency fluctuations and consolidation in the confectionary industry. However, Hershey has a low beta and generates steady growth through strong brands and supply chain efficiency.
This document provides an overview of General Mills' 2014 annual report. It discusses financial highlights for 2014 including a 1% increase in net sales to $17.9 billion and a 4% increase in adjusted diluted EPS to $2.82. The Chairman's letter discusses priorities for 2015 including accelerating sales growth by focusing on key consumer groups and product categories that are growing. The report provides information on General Mills' business segments, board of directors, and sales trends for various product categories including Big G Cereal.
This report analyzes The Fresh Market grocery store in Sarasota, Florida, which has experienced high employee turnover. The summary examines the company's history, strategies, competitive environment, and recommendations. The Fresh Market was founded in 1982 and focuses on high-quality fresh products in a simple atmosphere. It aims to differentiate through local/organic options. High turnover is reducing morale and raising costs. The analysis recommends improving benefits and raising wages to boost retention.
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Hershey Foods Corporation saw decreased sales and net income in 1999 compared to 1998. Sales declined due to the divestiture of the pasta business in early 1999 and difficulties fulfilling orders after implementing a new IT system. Net income increased due to a gain on the pasta sale, but excluding this was down 13% due to the sales decline and higher costs. The financial position remained strong with reduced debt from the pasta sale proceeds. Capital expenditures of $150-170 million annually are planned for manufacturing expansion and modernization.
Hershey Foods Corporation saw decreased sales and net income in 1999 compared to 1998. Sales declined due to the divestiture of the pasta business in early 1999 and difficulties fulfilling orders after implementing a new IT system. Net income increased due to a gain on the pasta sale, but excluding this was down 13% due to the sales decline and higher costs. The financial position remained strong with reduced debt from the pasta sale proceeds. Capital expenditures of $150-170 million annually are planned for manufacturing expansion and modernization.
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1) Net sales for Hershey Foods Corporation increased 6% from 1999 to 2000 due to higher core confectionery and grocery product sales in North America, new product introductions, and lower returns and discounts. Net sales decreased 10% from 1998 to 1999 primarily due to the sale of the pasta business.
2) Gross margin increased from 40.7% in 1999 to 41.5% in 2000 due to lower raw material costs and returns/discounts, but was partially offset by higher distribution costs. Gross margin decreased from 40.8% in 1998 to 40.7% in 1999 due to product mix and higher distribution costs.
3) Net income decreased 27% from 1999 to 2000 due to the 1999
- Hershey Foods Corporation produces and distributes a broad line of chocolate and non-chocolate confectionery and grocery products.
- Net sales rose in 2001 primarily due to acquisitions of mint and gum businesses and new product introductions. Net sales also rose in 2000 due to increased sales of base confectionery products.
- Gross margin was unchanged at 41.5% in 2000 and 2001. Excluding one-time charges, gross margin rose to 42.6% in 2001 due to lower costs and supply chain efficiencies.
- Hershey Foods Corporation produces and distributes a broad line of chocolate and non-chocolate confectionery and grocery products.
- Net sales rose in 2001 primarily due to acquisitions of mint and gum businesses and new product introductions. Net sales also rose in 2000 due to increased sales of base confectionery products.
- Gross margin was unchanged at 41.5% in 2000 and 2001. Excluding one-time charges, gross margin rose to 42.6% in 2001 due to lower costs and supply chain efficiencies.
Hershey Foods Corporation manufactures and distributes confectionery and grocery products. In 2002, the company's net sales decreased from 2001 primarily due to increased promotion costs, divestitures of some brands, and the timing of sales from an acquired gum and mint business. Cost of sales also decreased in 2002 from 2001 mainly because of lower costs for raw materials. However, gross margin increased due to decreased raw material costs and supply chain efficiencies. Selling, marketing, and administrative expenses decreased slightly in 2002 driven by savings from business realignment initiatives and the elimination of goodwill amortization, partially offset by expenses to explore a possible sale of the company.
Hershey Foods Corporation manufactures and distributes confectionery and grocery products. Net sales decreased in 2002 due to increased promotion costs, divestitures, and sluggish retail conditions. Cost of sales decreased due to lower raw material costs and supply chain efficiencies. In late 2001, the company approved a business realignment plan to improve efficiency, including outsourcing manufacturing, rationalizing product lines, improving supply chain, and workforce reductions, generating $75-80 million in annual savings. Charges of $312 million were recorded for these initiatives.
- Hershey Foods Corporation manufactures and sells confectionery and grocery products. In 2003, the company saw increased net sales and net income compared to 2002 through strategies focusing on key brands, gross margin expansion, and earnings growth per share.
- The company's strategies over a three-year period resulted in increased sales, gross margins, and returns through price increases, improved sales mix, lower costs, and share repurchases. However, challenges remain in driving profitable core confectionery growth and portfolio evolution.
- Hershey Foods Corporation manufactures and sells confectionery and grocery products. In 2003, the company saw increased net sales and income compared to 2002 through strategies focused on key brands, gross margin expansion, and earnings growth per share.
- Primary challenges for 2004 and beyond include profitable sales growth in core confectionery and broader snacks, evolving the product portfolio to meet consumer trends, and balancing growth and profit in seasonal and packaged candy businesses. The company expects continued revenue growth, margin expansion, and earnings growth per share through focus on these strategies.
This document is Hershey Foods Corporation's 2003 annual report and proxy statement to shareholders. It discusses Hershey's financial performance in 2003, including 13% earnings per share growth and continued gross margin expansion. It outlines the company's strategy of investing in core brands and expanding into snack market adjacencies. Key initiatives included restructuring the US sales force, creating a US Snack Group, and launching new better-for-you snack products. The report also discusses governance improvements and leadership changes on the board and in management.
This document is a Form 10-K annual report filed by Hershey Foods Corporation with the SEC for the fiscal year ending December 31, 2004. It provides information on Hershey's business operations, products, sales, marketing strategies, distribution networks, raw material costs, and price increases. Key details include that Hershey manufactures and sells over 50 brands of confectionery, snack, refreshment and grocery products in North America and other countries. It sources cocoa beans, its primary raw material, from various global regions.
This document is a Form 10-K annual report filed by Hershey Foods Corporation with the SEC for the fiscal year ending December 31, 2004. It provides information on Hershey's business operations, products, sales, distribution, raw materials, and pricing. Key details include: Hershey manufactures and sells confectionery, snack, refreshment and grocery products worldwide; its major brands include Hershey's, Reese's, and Kit Kat; cocoa beans are its primary raw material; and it announced price increases on half its domestic confectionery line in late 2004 and early 2005.
The document is The Hershey Company's annual report filed with the SEC for the fiscal year ended December 31, 2005. It provides information on Hershey's business operations including that it manufactures, distributes and sells confectionery, snack, refreshment and grocery products. It operates in the United States, Canada and Mexico and markets over 50 brands. The report lists the company's principal product groups and brands of confectionery, snack and refreshment products sold in the US. It also discusses the acquisitions of Joseph Schmidt Confections and Scharffen Berger Chocolate Maker in 2005.
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1. Hershey Foods Corporation
Proxy Statement and
2003 Annual Report
to Stockholders
March 12, 2004
To Our Fellow Stockholders:
I’m pleased to report on a healthier Hershey Foods, a company which now is on track and on trend.
Last year, 2003, reflected continued progress behind our value-enhancing strategy. In 2001, we began
to capitalize on the significant strengths within Hershey Foods while addressing the barriers to
growth. During this time, we restructured our cost base to enable increased investment in our brand-
building and selling capabilities.
This combination has resulted in solid market-share growth, as well as the achievement of top-tier
financial performance. Equally important, we have an organization that’s energized and committed
to delivering superior value to our stockholders. Clearly, we are on track. Moving forward, we are
on trend. We compete within the very attractive $60-billion snack market and have a competitively-
advantaged business system well-positioned to capture significant future growth opportunities.
On Track
2003 Results
Hershey Foods delivered balanced, sustainable performance in 2003. Through a combination of
improving top-line performance, market-share expansion and continued productivity gains, income
for the year, excluding items affecting comparability, was $474.7 million or $3.59 per share-diluted,
an increase of 13% vs. 2002*. This financial performance marked the third consecutive year of double-
digit gains in earnings per share and is significantly improved compared with the prior period:
1996-
2000
CAGR 2001 2002 2003
EPS Growth
(excluding items affecting comparability)* 5% 14% 12% 13%
* Please see the chart following this letter for a reconciliation of income and earnings per share-
diluted before cumulative effect of accounting change as reported under GAAP to income and per
share amounts excluding items affecting comparability.
2. 2003 Highlights
Profitable Organic Growth
Consolidated net sales increased by 1%. We made significant progress in the key areas that represent
both a source of competitive advantage and long-term marketplace potential. The first of these areas
is our scale brands.
These brands, which contribute close to two-thirds of our retail sales, achieved a 6% increase in retail
growth, gaining market share. A combination of value-added new items (Sugar Free and several
Limited Edition varieties), superior advertising, and solid retail execution are positioning these
brands for accelerating momentum.
The second such area of emphasis is “instant consumables,” or single-serve items. This packaging
format delivers superior taste and the convenience demanded by today’s consumer. In 2003, instant
consumables delivered 8% growth in retail takeaway.
We also continue to do well in the higher-margin Convenience Store channel, our third area of
emphasis. This retail segment accounts for 17% of our wholesale sales and is growing. In 2003, our
retail takeaway increased by 9%, resulting in a 0.9 point market-share gain in this channel. This
follows a 10% increase in 2002, clear evidence that we’re building growth on top of growth in this
segment.
One of our major challenges in 2003 was to successfully implement the price increase that took effect
in January. New product innovation and targeted retail programs, supported by strong in-store
execution, combined to increase our leadership position in the largest, most-profitable chocolate
segment (+6% growth and +0.2 share point gain). We achieved these results despite aggressive
competitive activity that followed the price increase.
As with most businesses, we didn’t achieve all of our goals for the year. Certain areas of our U.S.
portfolio must improve. While we are the leader in the non-chocolate segment and have terrific brands
(Jolly Rancher candy, Twizzlers candy, PayDay candy bar), we’ve yet to fully unlock their growth
potential. This is a very different segment from chocolate confectionery, both from a consumer and
customer standpoint. Our marketing initiatives must therefore reflect a different approach.
Fortunately, good work is underway in the non-chocolate segment, particularly in the area of new
products. We fully expect 2004 to be a much-improved year for these important brands.
Our business results were mixed outside the United States. Both Hershey Canada and Hershey
Mexico (70% of our International sales) had a very strong year, with solid increases in sales, market
share and income. The major area of weakness was in the Far East where several external factors
such as the weak economy and the SARS epidemic contributed to the shortfall. Hershey
International, while small overall, can and must be a source of predictable, profitable growth for the
Company.
The rationalization of non-strategic, low-profitability items, while affecting the growth rate in
reported sales, has been a key initiative in improving the long-term vitality of our portfolio. While
this program is scheduled to be completed in 2004, we will remain disciplined about eliminating items
that limit our potential for profitable growth.
Gross Margin Improvement
This past year marked the third consecutive year of very strong margin expansion. Improved price
realization and sales mix, combined with supply chain productivity, contributed 110 basis points to
gross margin expansion in 2003, building upon solid gains from the same factors in 2002 (+130 basis
points) and 2001 (+140 basis points).
ii
3. Our supply chain deserves special mention both in its contribution to improved gross margins and
in its role as a major source of competitive advantage for Hershey Foods. From Research and
Development on through Logistics, we have superb people and capabilities that yield a cost-effective
and flexible supply chain. All areas—from raw materials and packaging savings to in-plant
productivity initiatives to continued improvements within our logistics area—contributed in 2003
while delivering higher levels of customer service.
Organizational Effectiveness
Of equal, if not greater, importance to the success of 2003 was the progress we made with our
organization. It’s thanks to the over 13,000 people who are Hershey Foods that we were able to deliver
upon our commitment to win both with our consumers and our customers. Not a day goes by that
I don’t witness this commitment first-hand.
Two major organizational initiatives took place during the year. The first was the restructuring of
our U.S. sales force. Building upon Hershey Foods’ long-standing reputation as a superior selling
organization, we moved quickly and decisively to create a field sales structure that now reflects the
ongoing consolidation of our customer base. This new structure created numerous opportunities for
advancement for our sales personnel. By removing two layers of field sales management, we were
able to reinvest the savings in store-level coverage (up 29% since 2002), a key advantage for our
Company. Equally important was the investment in new information and selling capabilities.
Winning at retail now requires both superior selling and superior store-level execution capabilities.
I’m very encouraged by our progress to date.
The second major organizational change was the creation of the U.S. Snack Group in the second half
of 2003. This group will enable us to aggressively enter the appropriate snack market adjacencies.
We’re off to a great start, with several new initiatives already announced for introduction in 2004.
Building our strategic and leadership capabilities continues throughout the organization. One
exciting new effort is the KISS program (Knowledge and Insights for Strategic Success), launched
in 2003 and currently being rolled out to all management levels. KISS utilizes a common framework
for assessing business issues and developing sound business plans, and is designed to strengthen
Hershey Foods’ strategic thinking capabilities.
A strong indication of organization effectiveness is overall expense control. Despite significant
increases in medical costs, pension expenses, etc., all areas of the Company delivered disciplined cost
management during 2003. Our employees clearly were up to the challenge, understanding that
general and administrative expenses must increase at a lower rate than sales if we are to continue
to invest in our business over the long term.
Management and Board Changes
Two key management additions were made in 2003. Thomas K. Hernquist joined the Company in
April 2003 as Senior Vice President and Chief Marketing Officer. Tom brings to Hershey Foods a
broad base of marketing and general management experience across a large number of snack
categories. His impact already can be seen in his commitment to building superior marketing
capabilities within the Company and in major new product launches both in our core confectionery
business and snack market adjacencies.
John P. Bilbrey joined the Company as Senior Vice President, President Hershey International in
late 2003. JP has extensive international experience with major consumer products companies and
brings a wealth of practical “marketplace knowledge” to this challenging area.
iii
4. John C. Jamison, a director since 1974, has decided to retire from Hershey Foods’ Board of Directors.
John, one of the longest-serving Board members in the Company’s history, has served our
stockholders exceptionally well over the past 30 years. No one understands the Hershey culture and
its relationship both with Wall Street and the Hershey community better than does John. To say that
he will be missed is woefully inadequate. His dedication to our Company and its stockholders has
set an exceptionally high standard for us all. John has served as Chair of the Audit Committee and
has been a member of the Executive Committee since January 2002.
We were fortunate to add three new directors in 2003. Robert F. Cavanaugh joined the Board on
October 7, 2003, and serves on the Audit Committee and the Compensation and Executive
Organization Committee. Harriet Edelman joined the Board on April 22, 2003, and serves on the
Audit Committee and the Compensation and Executive Organization Committee. Marie J. Toulantis
also joined on April 22, 2003, and serves on the Audit Committee and the Committee on Directors
and Corporate Governance. All three of our new directors bring significant experience and
capabilities to the Hershey Foods Board.
Corporate Governance
Your Company, at both the Board and management levels, made significant progress in the area of
corporate governance during 2003. In addition to the three new directors highlighted in the previous
section, we established and filled the position of Deputy General Counsel and Chief Governance
Officer. Susan M. Angele joined Hershey Foods in September 2003, bringing extensive food company
legal experience. Susan will ensure on-going excellence in all governance matters.
The Board has complied with and in many instances exceeded the applicable requirements of the
Sarbanes-Oxley Act, the rules of the Securities and Exchange Commission and the listing standards
of the New York Stock Exchange. Our Board committees focusing on audit, directors (including
nomination)/corporate governance and executive compensation/organization are composed
exclusively of independent directors. Both our independent auditors and our internal audit group
report directly to the Audit Committee. We’ve revised the charters for all Board-level committees as
well as established the Hershey Foods corporate governance principles. These and related
governance materials can be viewed on Hershey Foods’ Internet website at www.hersheys.com.
To underscore that good corporate governance must extend beyond the Board level, we’re
implementing a new process to promote compliance with our Code of Ethical Business Conduct. The
Code has been updated, now is available on the Hershey Foods Intranet and Internet website and
will be communicated to all employees worldwide. All active salaried employees will be required to
sign a statement acknowledging that they have read the Code, will comply with it and will report
any Code violation. This new process will be implemented in the first half of 2004. The Company has
long encouraged frank communication to foster compliance and, with Board approval, has
established new Procedures for Submission and Handling of Complaints Regarding Compliance
Matters. This also is available on the Hershey Foods Intranet and Internet website.
The capital structure of the Company was enhanced through the $500-million share repurchase
program, of which 66% was completed in 2003. Taking advantage of both our strong cash flow from
operations and the more favorable tax treatment for dividends, the Board increased the dividend rate
by 21% in August 2003. This marks the 29th consecutive year that the dividend has been increased.
The Board also implemented share ownership guidelines for directors and reaffirmed guidelines for
key managers during the year, a move which further aligns the objectives of the Board and
management with those of our stockholders.
iv
5. On Trend
The past three years have built a sound foundation on which to grow. As we look to the future, there
are three areas that will keep Hershey Foods on trend.
First is the attractive category in which we compete. Confectionery is the largest segment within the
$60-billion snack market, representing 38% of total retail sales. In addition to its size, the
confectionery category is #1 in household penetration, #1 in impulse purchases, #1 in terms of
responsiveness to in-store merchandising and #1 in terms of conversion from awareness to purchase
at the checkout aisle. Together, these make the category a very profitable one for our Company and
for our retail customers.
The second area that will keep us on trend is our competitively-advantaged business. We have
category-defining iconic brands with thirteen $100-million brands and great recognition within the
snack market. Importantly, we’ve restored investment and vitality to these great brands over the past
few years. The combination of both brand and portfolio scale provides strong leadership within the
U.S. confectionery market. Our 29% market share is well above the competition and our broad retail
distribution across multiple customer channels provides significant marketplace leverage. Further
optimization of our manufacturing and logistics networks will facilitate better speed-to-market and
an improving cost structure. Key to our success will be the selling capabilities that we’re now putting
in place. With the new sales structure less than a year old, we anticipate a significant step-up during
2004 in our ability to meet the ever-changing needs of our retail customers.
What will really keep Hershey Foods on trend is capturing transformational growth opportunities
with consumers. We’ll do this first, by building Hershey’s leadership within our core confectionery
business and second, by expanding our presence in the broader snack market. Within core
confectionery, we’re reshaping our portfolio to ensure that we’re delivering the key consumer benefits
of taste, convenience and better-for-you. Whether it be Hershey’s S’mores, Swoops or our new Kisses
filled with Caramel, we’re adding value to our brand franchises and leveraging our asset base. In
addition to new products, we’ll continue to shift our brand/product mix to more profitable packaging
types such as instant consumables and to the more profitable trade channels such as Convenience
Stores. We’re intent on building upon the success we’ve achieved over the past few years.
Moving beyond core confectionery growth, we’ll aggressively expand our presence within the broader
snack market. While we have a 29% market share in the core confectionery market, we only have
an 8% share in the broader snack market. There’s clearly room to grow.
Our initial efforts are in the better-for-you snack and nutrition-bar segment. This segment measures
$3.3 billion and has demonstrated consistent double-digit growth over the past five years. We see
numerous opportunities to leverage our existing capabilities, with several new products planned
for introduction in 2004. We’ve announced our Hershey’s 1 gram Sugar Carb line and Hershey’s
Smart Zone bar line. Both are on-trend with consumers and represent a profitable growth business
for our retail customers and for Hershey Foods. Our new product strategy, in total, provides
incremental growth while also allowing us to de-emphasize the slower-growth segments within our
existing portfolio.
We know that we must increase our productivity initiatives if we are to continue winning in the
marketplace. In 2004, we face a significant increase in raw material costs, primarily cocoa, that will
add to this challenge. However, we have hundreds of projects underway to ensure that we generate
the necessary funds to invest in our brands and achieve balanced performance. Our employees know
what’s expected of them and will deliver.
v
6. In closing, we’ve made solid progress over the past three years, with 2003, in particular, coming in
very strong. We’ve lowered our cost base, gained market share, and delivered superior financial
performance. Hershey Foods clearly is on track. Now, our sights are firmly set on the future in terms
of capturing the immense transformational growth opportunities I described above and delivering
superior stockholder value over the long-term.
As I conclude my third year as CEO, I continue to be gratified and energized by the support across
the Company for the path we’ve chosen. Certainly, there’s a growing appreciation of the challenges
that will confront us in this ever-changing marketplace. However, there’s also an ever-greater resolve
to ensure the long-term success of Hershey Foods. All in all, it makes for a winning combination.
Richard H. Lenny
Chairman of the Board, President
and Chief Executive Officer
Safe Harbor Statement
Please refer to the Safe Harbor Statement on page A-24 for information about factors
which could cause future results to differ materially from forward-looking
statements, expectations and assumptions expressed or implied in this letter to
stockholders or elsewhere in this publication.
vi
7. Hershey Foods Corporation
Reconciliation of Items Affecting Comparability
For the years ended December 31, 1996 2000 2001 2002 2003
In thousands of dollars except per Per Share- Per Share- Per Share- Per Share- Per Share-
share amounts Diluted Diluted Diluted Diluted Diluted
Income before cumulative effect
of accounting change . . . . . . . . . . . $273,186 $1.75 $334,543 $ 2.42 $207,156 $ 1.50 $403,578 $2.93 $464,952 $ 3.52
Items affecting comparability
after tax:
Business realignment and asset
impairments included in cost
of sales . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 31,765 0.23 4,068 0.03 1,287 —
Costs to explore the sale of the
Company included in selling,
marketing and administrative
expense . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 10,907 0.08 — —
Gain on sale of airplane included
in selling, marketing and
administrative expense . . . . . . . . — — (4,475) (0.03) — — — — — —
Business realignment and asset
impairments, net . . . . . . . . . . . . . . . — — — — 140,085 1.02 17,441 0.13 14,201 0.11
vii
(Gain) loss on sale of business . . . 35,352 0.23 — — (1,103) (0.01) — — (5,706) (0.04)
Elimination of amortization of
goodwill and other intangible
assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,443 0.08 13,477 0.10 13,579 0.10 — — — —
Income excluding items affecting
comparability . . . . . . . . . . . . . . . . . . . $320,981 $2.06 $343,545 $ 2.49 $391,482 $ 2.84 $435,994 $3.17 $474,734 $ 3.59
1996-2000 Increase Increase Increase
CAGR 5% vs. prior yr. 14% vs. prior yr. 12% vs. prior yr. 13%