The Hershey Company and the Global Shea Alliance
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1 The Hershey Company and the Global Shea Alliance Ray Major March 24, 2014
2 KEY MESSAGES The Hershey Company will be an active and supportive member of the Global Shea Alliance We will look for synergies with and use lessons learned from our cocoa sustainability programs We will work with our supply chain partners to develop programs on the ground that build capacity and support community development through women s education and empowerment In the food industry shea competes with other ingredients. We must always design our programs to make shea more, not less competitive with its alternatives 1
3 FIRST - A LITTLE ABOUT HERSHEY AND SHEA Hershey s annual shea butter consumption is about 2,200 tonnes Shea butter is a component of cocoa butter equivalents (CBE s) used to make the white coating in Cookies n Crème and other chocolate flavored coatings CBE represent about 2% of our annual ingredient spend CBE s are either a blend of palm oil and shea or a blend of palm oil and sunflower oil 2
4 HERSHEY S LEGACY
5 MILTON S. HERSHEY The first person to link Commerce with Compassion -Johnny O Brien, 65 MHS graduate MHS President
6 OUR FIRST 100 YEARS OF MAKING A DIFFERENCE 1903 Hershey, PA Founded 1909 Hershey Deed of Trust Establishing Hershey Industrial School 1894 Hershey Company Founded 1905 Hershey Trust Company Founded 1918 M.S. Hershey Deeds Fortune to Hershey Industrial School 5
7 HERSHEY TRUST COMPANY TRUSTEE MILTON HERSHEY SCHOOL (non-profit) MILTON HERSHEY SCHOOL Founded 1909 Enrollment 1,800+ Over 10,000 Acre Campus 155+ Student Homes Four Instructional Centers Founders Hall Administrative Offices Visitors Reception Area Chapel - Auditorium MILTON HERSHEY SCHOOL TRUST HERSHEY TRUST COMPANY (100% owned) Real Estate Management Land Holdings Lease & Rental Properties Retail Property Management THE HERSHEY COMPANY (31% Stock Ownership 72% Interest) HERSHEY ENTERTAINMENT AND RESORTS (100% Owned) Hersheypark, Hersheypark Stadium, Giant Center, Hershey Bears, Hersheypark Arena, Star Pavilion, ZooAmerica, Hershey Hotel, Hershey Spa Hershey Lodge & Convention Center, Cocoa Beanery, Hershey Nursery, Hershey Dry Cleaning, Hershey Country Club, Hershey Links, Spring Creek Golf Course, Dutch Wonderland, Hershey Highmeadow Campground THE M.S. HERSHEY FOUNDATION (nonprofit) HERSHEY THEATRE (Managed by Hershey Entertainment & Resorts) THE HERSHEY STORY Museum on Chocolate Avenue HERSHEY GARDENS CHOCOLATETOWN SQUARE (Park) HERSHEY COMMUNITY ARCHIVES MILTON S. HERSHEY TESTAMENTARY TRUST (non-profit) DERRY TOWNSHIP SCHOOL SYSTEM MEDICAL CENTER, PENN STATE UNIVERSITY Founded: 1963 $50 Million Donation from M.S. Hershey Foundation & $21 Million in Federal & State Grants MILTON S. HERSHEY 6
8 MILTON HERSHEY SCHOOL Founded in 1909 by Milton & Catherine Hershey as a home for orphan boys Today, boys and girls of all races attend grades pre-k through 12 Students come from severe poverty (annual HHI $14,500) and social risk 7
9 HERSHEY, A GLOBAL COMPANY $6.6 billion net sales in 2012 ~14,000 employees around the world Over 80 brand names Products available in over 70 countries around the world
10 14 NORTH AMERICAN MANUFACTURING LOCATIONS Dagoba Brookside (British Columbia) Robinson Memphis Brookside (Quebec) Toronto (Hershey Canada) Hazleton Reese Y&S Lancaster Stuarts Draft West Hershey Hilo, Hawaii Monterrey Guadalajara
11 INTERNATIONAL MANUFACTURING LOCATIONS China 46% joint venture with Lotte Golden Monley 5 additional manufacturing operations Brazil 51% joint venture with Bauducco India (2) 100% Hershey owned & operated
12 HERSHEY S BRANDS HERE IN THE US
13 COCOA SUSTAINABILITY OUR PHILOSOPHY Cocoa is a strategic ingredient we need to guarantee supply How? Motivated cocoa communities farmers and thriving cocoa Government engagement Efficient supply chain partners Programs on the ground that build capacity Standards and Independent Verification 12
14 TRANSFORMING COCOA IN WEST AFRICA Where We Are Today Subsistence Farming Where We Need to Go Business Farming Low Yields, Extraction Mentality, Extra Cash High Yields Sustainable Production Income Poverty, Social Issues Pathway to Wealth, Thriving Communities Sr. Leaders Meeting /15/2014 9:52 AM 13
15 Sr. Leaders Meeting /15/2014 9:52 AM 14
16 HERSHEY S LEARN TO GROW: DISTANCE LEARNING The purpose of distance learning is to build awareness potential for community development through advanced technology Accelerate the use of technology based learning in other rural Ghana schools Technology can and will revolutionize development & learning in the next 10 years Technology will become evermore affordable & available for rural Ghanaians 15
17 16
18 SO WHAT ABOUT SHEA SUSTAINABILITY? Shea is a not a strategic ingredient for Hershey, but it has strong synergies with cocoa Same countries Similar and in some cases linked social issues Similar supply chain issues 17
19 TRANSFORMING SHEA IN WEST AFRICA Where We Are Today Extraction/Collection Where We Need to Go Managed Agroforestry Systems Weak Individual Collectors Strong Organizations In Control of their Future Poverty, Social Issues Pathway to Wealth, Thriving Communities 18
20 HERSHEY AND SHEA SUSTAINABILITY OUR VISION FORWARD The price of shea sustainability, like any ingredient, should be included in its cost. We will look for synergies with our programs in cocoa We will work with our supply chain partners to develop on the ground programs that build capacity and efficiency with focus on women s education and empowerment. We will look for Public and Private Partnerships that strengthen and improve the transparency of the shea supply chain 19
21 HERSHEY AND THE GLOBAL SHEA ALLIANCE Our expectation for GSA Provide a forum that can bring together all components of the shea supply change Establish standards and guidelines that insure a sustainable shea supply Independently verify that our programs are working Liaise with the governments of shea producing countries Initiate and/or administer public private partnerships when and where they occur Be the voice of shea 20
22 THANK-YOU
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