Hershey chief Dave West has defended the chocolate giant’s plans to end production at its original plant, insisting the moves will help the US business stay competitive with “global players”.
West, speaking yesterday (14 June) as Hershey disclosed more details on its plans to switch production from the facility built by the company’s founder, said the company’s “Next Century” programme would benefit the business.
Go deeper with GlobalData
“Next Century will ensure that we continue to make the world’s best chocolate and are well-positioned in the marketplace,” West said. “Our investment will create a highly flexible, cost-effective manufacturing facility that will enable us to remain competitive with global players while satisfying the needs of retail customers and consumers.”
He added: “The 19 East Chocolate Avenue factory is a proud part of the company’s heritage, but the facility is over 100 years old, and simply cannot be modernised to meet the manufacturing needs of a 21st century business.”
Hershey’s decision to switch production from the plant built by Milton Hershey in 1905 to the company’s West Hershey facility is part of a US$300m revamp of its supply chain.
Up to 600 jobs could be lost as Hershey plans to invest in “technology and automation” at the West Hershey facility. Union members gave their approval to the moves earlier this month.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataHershey is using part of the 19 East Chocolate Avenue facility as office space. The company said it will incur up to $170m in costs from the changes but said the revamp could save the business up to $80m a year – which it plans to invest in its brands and “global capabilities”.
West said: “Our recent marketplace performance has been driven by the investments we have made in our brands and our global capabilities, fueled by our strategic focus on supply chain efficiency and effectiveness.
“Savings from project Next Century will enable us to continue making investments that will deliver core business growth and position us for long-term success in the global confectionery marketplace. We must continue to look at all options that provide us the flexibility to make the investments necessary to ensure that Hershey is as successful in this century as it was in the past century.”
