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Hershey’s outsourcing plans have a bitter taste

BY Tara Smith

HERSHEY, Pa. Hershey’s cutbacks, plant closings and outsourcing have people questioning how “American” the “great American chocolate bar” is. As the chocolate company closes six American and Canadian plants to move production lines to plants in Mexico, 1,500 U.S. Jobs will be cut.

After 100 years of churning out Hershey chocolate, one central Pennsylvania plant will be silenced, along with two plants in Connecticut and California, as production moves to plants in Mexico, cutting 1,500 U.S. jobs. Three more plants in Canada also will be closed.

Company spokesman Kirk Saville said in a statement that moving more production lines to Mexico will help guarantee a majority of Hershey products will be made and sold in America. He added that the changes were necessary for the confectionary company to remain competitive in the global marketplace. “When these changes are complete, 90 percent of the items that Hershey sells in the United States and Canada will continue to be made in these countries,” he said

Saville also stated that Hershey’s Milk Chocolate, Hershey’s Kisses and Reese’s Peanut Butter Cups will continue to be made in central Pennsylvania, but by fewer people.

But members of the Chocolate Workers Union Local 464, including Dennis Bomberger, are concerned outsourcing production will hurt products still made in the United States. “What we don’t want happening is the product we continue to make in Hershey [being] hurt by the perception that it’s made in Mexico,” Bomberger stated.

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Dr Pepper adds another flavor to its stable of diet soft drinks

BY Allison Cerra

PLANO, Texas Cadbury Schweppes is set to premiere a new beverage for one of its biggest brands.

The beverage maker will be rolling out Cherry Chocolate Diet Dr Pepper, the third flavor extension in the brand’s history.

The new beverage combines the taste of Diet Dr Pepper with a sweet cherry dipped in luscious chocolate. The drink contains no calories or carbohydrates.

Dr. Pepper’s first brand extension, Cherry Vanilla, launched in 2004, was the company’s most successful product introduction in more than a decade and was followed by the wildly popular Dr Pepper Berries and Cream, the company said.

Cherry Chocolate Diet Dr Pepper will be available for a limited time only.

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It’s Miller Time for Grolsch

BY Tara Smith

LONDON London-based beer giant SABMiller on Monday announced its offer of $1.2 billion for Dutch brewer Grolsch, which is still sold in bottles with a ceramic stopper.

SABMiller, whose brands include Miller Lite in the United States, is betting beer drinkers will be willing to pay more for the Dutch beer, brewed in Enschede, Netherlands. The company is following in the consolidation trend of other big beer groups, including Amsterdam-based Heineken, which added diversity in its portfolio by acquiring local or niche brands and applying its marketing and distribution clout to serve the brew to a wider audience. “Grolsch fills an important gap in our portfolio, which lacks northern European brands,” SABMiller Marketing Director Nick Fell told analysts during a conference call.

Although Grolsch has wide global name recognition, 75 percent of its sales are still in the Netherlands, meaning there is a lot of potential for the brand in the international market. Grolsch shares with Heineken a certain Dutch flavor not found, for instance, in American beers. SABMiller will try to market Grolsch in places like Colombia where upwardly mobile beer drinkers want a beverage that conveys status but doesn’t challenge their taste buds too much. “We see significant potential across Africa and Latin America, where the premium market is still in its infancy,” SABMiller’s chief financial officer, Malcolm Wyman, told analysts.

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