TheHershey Company (NYSE: HSY) is the largest

producer of quality chocolate in North America and a global leader in chocolate and
sugar confectionery. Headquartered in Hershey, Pa., The Hershey Company has
operations throughout the world and more than 12,000 employees. With revenues of
more than $5 billion, Hershey offers such iconic brands as Hershey's, Reese's, Hershey's
Kisses, Kit Kat, Twizzlers and Ice Breakers as well as the smooth, creamy indulgence of
Hershey's Bliss chocolates. Hershey is a leader in the fast-growing dark and premium
chocolate segment, with such brands as Hershey's Special Dark and Hershey's Extra
Dark. In addition, Artisan Confections Company, a wholly owned subsidiary of The
Hershey Company, markets such premium chocolate offerings as Scharffen Berger and
Dagoba. For more than 100 years, The Hershey Company has been a leader in making a
positive difference in the communities where we live, work and do business. The Milton
Hershey School, established by the company's founder in 1909, provides a nurturing
environment, quality education, housing, and medical care at no cost to children in social
and financial need. The School is administered by the Hershey Trust Company, Hershey's
largest shareholder, making the students of Milton Hershey School direct beneficiaries of
Hershey's success

MISSION STATEMENT
Bringing sweet moments of Hershey happiness to the world every day.
To our stakeholders, this means:
Consumers – Delivering quality consumer-driven confectionery experiences for all
occasions
Employees – Winning with an aligned and empowered organization … while having fun
Business Partners – Building collaborative relationships for profitable growth with our
customers, suppliers and partners
Shareholders – Creating sustainable value
Communities – Honoring our heritage through continued commitment to making a
positive difference

CORPORATE PHILOSOPHY
In seeking to balance our desire for profitable growth with the obligations which we have
to various other constituencies, we shall strive to:
Protect and enhance the corporation's high level of ethics and conduct.
Maintain a strong "people" orientation and demonstrate care for every employee.
Attract and hold customers and consumers with products and services of consistently
superior quality and value.
Sustain a strong results orientation coupled with a prudent approach to business.

MANAGEMENT TEAM
David J. West President and Chief Executive Officer
Humberto P. Alfonso Senior Vice President, Chief Financial Officer C. Daniel Azzara
Vice President, Global Research and Development John P. Bilbrey Senior Vice
President, President Hershey North America Charlene H. Binder Senior Vice President,
Chief People Officer Michele G. Buck Senior Vice President, Global Chief Marketing
Officer George F. Davis Senior Vice President, Chief Information Officer Javier H.
Idrovo Senior Vice President, Strategy and Business Development Thaddeus J.
Jastrzebski Senior Vice President, President Hershey International Terence L. O'Day
Senior Vice President, Global Operations Burton H. Snyder Senior Vice President,
General Counsel and Secretary

It all started with a decision.

Our company originated with candy-manufacturer Milton Hershey’s decision in 1894 to
produce sweet chocolate as a coating for his caramels. Located in Lancaster,
Pennsylvania, he called his new enterprise the Hershey Chocolate Company. In 1900, the
company began producing milk chocolate in bars, wafers and other shapes. With mass-
production, Hershey was able to lower the per-unit cost and make milk chocolate, once a
luxury item for the wealthy, affordable to all. One early advertising slogan described this
new product as “a palatable confection and a most nourishing food.”

A company on the move.

The immediate success of Hershey’s low-cost, high-quality milk chocolate soon caused
the company’s owner to consider increasing his production facilities. He decided to build
a new chocolate factory amid the gently rolling farmland of south-central Pennsylvania in
Derry Township, where he had been born. Close to the ports of New York and
Philadelphia which supplied the imported sugar and cocoa beans needed, surrounded by
dairy farms that provided the milk required, and with a local labor supply of honest, hard-
working people, the location was perfect. By the summer of 1905, the new factory was
turning out delicious milk chocolate.

New products, hard times.

Throughout the next two decades, even more products were added to the
company’s offerings. These included MR. GOODBAR (1925), HERSHEY’S
Syrup (1926), chocolate chips (1928) and the KRACKEL bar (1938). Despite the
Great Depression of the 1930s, these products helped the newly incorporated
Hershey Chocolate Corporation maintain its profitability and avoid any worker
layoffs. Nevertheless, supported by the CIO labor union, a group of workers
staged a six-day strike that ended with the strikers being forcibly removed by
loyal workers and local farmers

A family friend becomes a family member.

The post-war period saw the introduction of a host of new products and the acquisition of
an old one. Since 1928, H.B. “Harry” Reese’s candy company, also located in Hershey,
had been making chocolate-covered peanut butter cups. Given that Hershey Chocolate
supplied the coating for REESE’S “penny cups”; (the wrapper said, “Made in Chocolate
Town, So They Must Be Good”), it was not surprising that the two companies had a good
relationship. As a result, seven years after Reese’s death in 1956, the H.B. Reese Candy
Company was sold to Hershey Chocolate Corp

FINDING FORMULA
While his company was successful enough selling sweet chocolate products, Milton
Hershey was certain the real market lay in milk chocolate. The problem was in
developing a formula for manufacturing it cheaply and efficiently, while still maintaining
a high level of quality.
Hershey built a milk-processing plant on the family farm in Derry Township in 1896 and
spent the next several years developing a viable formulation for milk chocolate. Dressed
in hip boots, Hershey worked day and night, going back and forth between the
condensing room and the creamery, rarely even stopping for meals. Finally, in 1899, he
cracked the recipe and became the first American to manufacture milk chocolate.

GROWING GLOBALLY
Despite Milton Hershey’s death in 1945, Hershey Chocolate Corporation retained the
entrepreneurial values of innovation and risk-taking imprinted on it by its founder.
Throughout the post-World War II period, a host of new products were introduced, many
of which were successful, some of which were discontinued after only a few years.
By the 1960s, the company was ready to enlarge the scope of its operations. One example
of this new approach was the purchase in 1963 of the H.B. Reese Candy Co. Another was
the company’s diversification into pasta manufacturing with the acquisition of San
Giorgio Macaroni, Inc. and Delmonico Foods, Inc. The company also expanded
geographically, building new chocolate plants in Ontario, Canada and Oakdale,
California

ADVERTISING TO THE NATION

Except for a TV and billboard campaign in Canada in 1964, the company had never
really done advertising on a national scale. In 1968, the newly renamed and reorganized
Hershey Foods Corporation announced plans for a nationwide consumer advertising
campaign spearheaded by the famous Ogilvy & Mather ad agency.
Starting with a Sunday newspaper supplement in July, 1970, followed two months later
by television and radio commercials, the campaign was an immediate success. Sales of
REESE’S peanut butter cups and HERSHEY’S KISSES Chocolates, in particular, rose
dramatically. But while the company today continues to advertise in all media, the quality
of our products is still our best form of advertising. Milton Hershey would have liked
that.

HERSHEYS GOES INTERNATIONAL

In addition to being the leading producer of chocolate and non-chocolate confectionary
and other grocery products in North America, The Hershey Company also carries on a
significant international presence with operations in more than 90 different countries.
Hershey's International division exports HERSHEY’S chocolate and grocery products
worldwide and maintains licensing agreements with partners in nations such as South
Korea, Japan, the Phillippines and Taiwan. We don’t believe Milton Hershey would have
been at all surprised to learn that his HERSHEY’S KISSES Chocolates are especially
popular in Japan.

100 Calorie Bars

"More Pleasure Less Guilt," HERSHEY'S introduces chocolate indulgence with 100
Calorie Bars.
 ALMOND JOY candy bar
If "SOMETIMES YOU FEEL LIKE A NUT," grab this classic treat of almonds and
sweetened coconut dipped in milk chocolate.

CACAO RESERVE BY HERSHEY'S

From the time of the Aztecs, the cacao tree has been cherished for its precious beans.
CACAO RESERVE BY HERSHEY'S brings you an indulgent experience made with
carefully chosen, slowly roasted cacao beans.

CADBURY chocolates
The Hershey Company holds a license to manufacture CADBURY chocolate products in
the United States...

5th AVENUE candy bar

First introduced in 1936, this chocolate peanut butter bar contributed to the war effort—
and is still enjoyed today.
 HEATH toffee bar
Perfected by the Heath brothers in 1928, this milk chocolate English toffee bar is a
classic.

HERSHEY'S chocolate bar

For years, this chocolate bar has simply been making people happy. Whichever flavor
you choose - HERSHEY’S milk chocolate, HERSHEY’S milk chocolate with almonds,
or HERSHEY’S COOKIES ‘N’ CRÈME - you’ll be treating yourself to a delicious
classic.

HERSHEY'S EXTRA DARK

HERSHEY'S EXTRA DARK is available in several indulgent flavors to meet a variety
of taste preferences.

HERSHEY'S POT OF GOLD boxed chocolates

HERSHEY’S POT OF GOLD boxed chocolates is the perfect gift for everyone on your
list for any season. It’s so good, you might even want to give it to yourself.
 HERSHEY'S KISSES brand chocolates
HERSHEY’S KISSES brand chocolates, with their unique shape and foil wrap, are truly
an American favorite.

KIT KAT wafer bar

KIT KAT wafer bar is a simple, uncomplicated chocolate candy that lets you live on the
light side of life. It has light, crispy wafers in chocolate that complement your
lighthearted, positive approach to life.

MAUNA LOA
The MAUNA LOA macadamia nut offers a delicious uniqueness that sets it apart from
all other nuts.

MILK DUDS candy

Bite-size chocolate- covered caramels, MILK DUDS candy is a perfect snack for a night
at the movies or anytime!
 HERSHEY'S MINIATURES chocolate bars
"A LITTLE SOMETHING FOR EVERYONE."

MOUNDS candy bar

Nutty or not? If not, grab a MOUNDS candy bar and enjoy the taste of sweet coconut
dipped in rich, dark chocolate.

MR. GOODBAR candy bar

Will your P.M. snack be salty or sweet? With MR. GOODBAR's combination of
crunchy peanuts and chocolate candy, you don't have to decide.

HERSHEY'S NUGGETS chocolates

"ONE OF LIFE'S LITTLE REWARDS."

PAYDAY peanut caramel bar

 Can’t get enough peanuts? Try a PAYDAY peanut caramel bar, with sweet caramel and
tons of salty peanuts.

SKOR toffee bar

With buttery toffee enrobed in milk chocolate, this bar’s a distinctively rich treat. Also
use it in your holiday recipes for really decadent baked goods.

SPECIAL DARK
Our classic SPECIAL DARK mildly sweet dark chocolates are available in a variety of
forms and sizes, nearly everywhere HERSHEY'S chocolate is sold.

HERSHEY'S SYMPHONY milk chocolate bar

HERSHEY’S SYMPHONY milk chocolate will bring music to your mouth with its
creamy milk chocolate taste. Indulge yourself.

HERSHEY'S Sandwich Cookies

Chocolate cookies layered with milk chocolate and filled with creme in your favorite
candy flavors…HERSHEY'S, REESE'S and HEATH.
 Perfect for any occasion, HERSHEY’S Syrup is a household favorite for flavored milk,
ice cream or to make everyday treats extra special.

Hershey's Chewing Gum

Introduction
Hershey Chocolate Company manufactured chewing gum between 1915 and 1924. The
gum was first introduced under the name "Easy Chew." Clayton Snavely, Milton
Hershey’s cousin and the man put in charge of developing the chewing gum business,
was interviewed in 1954 and related the story of how Hershey Chocolate got into the
chewing gum business.
About the third week in January 1915, Clayton Snavely spent the weekend with Mr. and
Mrs. Hershey at the Dennis Hotel, in Atlantic City, New Jersey. After breakfast Sunday
morning the two men took a walk down the boardwalk. There they saw a large Wrigley
Gum advertisement.
Mr. Hershey said, "Clayton, Beech Nut Gum has been a phenomenal success. It has gone
to their heads, and they think they’re going to put the name Beech Nut on chocolate and
put Hershey out of business. Well, there’s only one way to meet fire. It’s to fight it with
fire. I’m thinking about doing something in the chewing gum line."

Learning to make gum

Nothing more was said about it and Snavely headed back to Hershey, Pennsylvania.
Three days later Mr. Hershey called him into his office. William Murrie was also there.
Murrie had located a man in New York City who owned some chewing gum equipment
for sale. Hershey instructed Snavely to travel to New York and purchase the equipment.
In addition, Snavely was to learn everything he could about chewing gum manufacture.
Mr. Hershey said, "Clayton, there’s what I want you to do. I want you to go over and buy
that equipment in your own name. We don’t want to appear in it in any way. I want you
to spend as much time with him as necessary. Get all the information you can, about the
formula, the procedure, the making of chewing gum. I want you to find out where you
can buy chicle, which is the basic chewing gum. Get all the information you can. Take as
much time as you want. And come back with everything you can tell me."
After picking up expense money from the Hershey Trust Company, Snavely caught the
afternoon train to New York. The equipment was purchased for $500 cash in order to
hide the Hershey name. He spent several days learning the basics of making chewing
gum. The seller also introduced him to the wholesale district and helped him buy the
original purchase of chicle.
The machinery, which had been stored in the basement of a cigar factory on West
Broadway, was crated and shipped to Hershey and set up on one of the second floors in
the chocolate factory. The purchase included:

1 mixer and attachments

1 set of rolls and attachments
1 chicle chopper
2 scoring machines
36 five-foot drying boards
24 small drying boards
36 chicle dryers
1 marble slab

After Snavely returned home, Milton Hershey met again with him and gave him new
instructions. He wanted Snavely to visit the Beech Nut plants in New York that offered
visitor tours and glean what information he could from observing and talking with the
locals. Snavely left town again to follow Mr. Hershey’s instructions. Once he got back,
gum manufacture experiments began.

Naming the product

Joe Snavely, from the printing department, was instructed to print labels for the new
product. The question was, what to call the chewing gum? Someone said, ‘Easy Chew.’ It
certainly couldn’t be HERSHEY at that stage of the game. So a blue label was designed
with a white printed name on it, EASY CHEW, in big letters. They began to make the
gum, and it wasn’t bad. On the strength of that, they began to sell the penny product
around Hershey. They sold it at the Hershey Department Store; Erb & Son, Hockersville;
Frank B. Kendig, Annville; and some other local outlets. Mr. Hershey said, "We’re on the
right track; go ahead." More and larger cooking, sizing, and wrapping machines were
bought. Additional help was hired. As the chewing gum production was getting
underway, Thomas J. Walton, one of the most experienced men in the chewing gum
business, was hired.

Marketing Hershey's Gum: 6 sticks for a nickel

William Murrie, always the salesman, conceived the idea of packing six sticks for a
nickel instead of five, the industry standard. Mr. Hershey thought it was all right.
Unfortunately, the gum wrapping equipment was all set up to pack five sticks. "Well,"
Mr. Hershey said, "we’ll change it." Changing it meant a long delay and a complete
overhaul of the wrapping equipment.
So it was all set up and Hershey started to market its new product. Orders increased and
production leapt to keep up with them. More equipment was added and before long there
were twenty-four wrapping machines. About a hundred people were working full time,
ten-hour days and a half day on Saturday, a 54 hour week. A brand-new chewing gum
label was designed, carrying the Hershey name, similar in design and color as the milk
chocolate wrapper.
The initial success of Hershey’s gum business was short lived. Wrigley called the
attention of the federal government to the fact that Hershey was selling six sticks of gum
in a pack but only paying tax on five sticks. To every twenty pack box, a six-cent war tax
stamp had to be affixed. The stamp was applied by special machines. Hershey, with an
extra stick in every pack, had one hundred twenty sticks in a box, whereas Wrigley only
had a hundred sticks. Wrigley argued that Hershey was not paying his full tax. As a
solution, the government slapped an extra four cents on the Hershey box. Hershey was
triply penalized: he gave the public the extra stick at the same price of his competitors, he
had to pay a four cents tax on each box, and he had to pay for putting on the extra tax
stamps by hand, because his present machines could not be adjusted to handle the
additional tax.

Production moves to New York City

In 1919 the factory was moved to New York City. Here, in the O’Neil-Adams Building, a
six story structure on Sixth Avenue between 21st and 22nd Streets, where they made
chocolate coating and some bar goods, they also made chewing gum. Wheat was
introduced as an ingredient, in the form of finely ground flour to make the gum more
chewy. The flour was ground in the Hershey, Pennsylvania sugar mill and shipped to
New York.
Production was raised to five thousand boxes a day. Unfortunately, orders did not match
production. The first job John Gallagher had when he came to Hershey in 1920 was to cut
down chewing gum production to the size of the orders. Gallagher counseled Milton
Hershey to drop the chewing gum line. Herbert Hoover, the new Secretary of Commerce
in the Harding administration, put restrictions on the importation of raw materials for the
manufacture of non-essential products. In 1921, chewing gum was not yet regarded as
essential to national morale. As a result, Hershey could not get sugar or chicle for his
chewing gum. Production limped on a few more years before being discontinued in 1924