Volume 2, No. 15. August 9, 2002
Confectionery consternation
The residents
of Hershey, Pennsylvania, could use a bit of amusement of late. That, at least,
is one thing they are guaranteed of keeping, for the present.
The town built on the back of the Hershey chocolates empire was rocked a couple
weeks ago by the news that the Milton Hershey School Trust was looking at putting
the Hershey Foods Co. up for sale. The Trust, which owns 77 percent of Hershey
Foods, said the sale was the “most prudent course of action consistent
with its diversification objectives and its fiduciary obligation to the Milton
Hershey School.” The school was founded in 1909 by Milton Hershey, the
chocolate factory’s founder, to serve disadvantaged students. Analysts
say that if a deal goes through, it would be huge: Hershey has $4.6 billion
in annual sales and controls 31 percent of the U.S. candy market.
Hershey Entertainment and Resorts Co., which owns and operates Hersheypark and
Dutch Wonderland, is not part of the proposed sale. “We have received word
from Robert C. Vowler, the Trust CEO, that he has no intention of selling the
company,” said Garrett Gallia, director of corporate relations for Hershey
Entertainment and Resorts. The park, Gallia said, is part of the diversification
the trustees are seeking. While Hershey Foods makes up 52 percent of the Trust’s
portfolio, the Entertainment and Resorts company accounts for less than 3 percent.
Also safe are the park’s mascots, the oversized Hershey’s bar, Reese’s
Cups and Kisses greeting guests at the park. Hersheypark established a trademark
license agreement with the food company in 1985, and the park may use the characters
royalty-free “for as long as we choose to use them,” Gallia said.
“That licensing agreement would be binding for any potential purchaser.”
Hershey’s Chocolate World next to the park’s front gate is owned by
the food company and would be part of the transaction. “We’ve always
considered Chocolate World a retail outlet with an informational element,”
Gallia said, an element which has included an edutainment dark ride and this
year added a 3D movie.
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