When Coffee Dreams, It Dreams of Chocolate
Starbucks Coffee Company (Nasdaq:SBUX) and The Hershey Company (NYSE:HSY) today announced a development and distribution agreement that will help transform the premium chocolate segment. The companies will create and market a new Starbucks-branded premium chocolate platform in the United States starting this fall.
“Chocolate is the perfect complement to coffee and tea and has long been a part of the coffeehouse experience. We are excited to bring premium chocolate inspired by Starbucks coffee and cafe flavors to Starbucks customers and chocolate lovers,” said Gerry Lopez, president, Starbucks Global Consumer Products Group. “Creating a new chocolate platform is another way for us to extend the Starbucks Experience outside of our stores and enhances the coffeehouse experience.”
Expert chocolatiers are developing products that translate Starbucks coffeehouse flavors into delicious and distinct chocolate products. The premium platform will combine the highest quality chocolate with Starbucks beverages and cafe flavors, as well as delectable fruits, nuts, herbs and spices. In addition to innovative flavors, this platform will offer new forms and packaging and will be available in a broad range of retail channels such as food, drug and mass merchandise outlets across the United States.
The alliance will draw on the premium expertise of Artisan Confections Company, a wholly owned subsidiary of The Hershey Company. Artisan Confections’ unique portfolio consists of some of the world’s finest chocolate, including Scharffen Berger and the exquisite truffles of Joseph Schmidt.
“Starbucks is one of the world’s leading brands among consumers seeking a unique experience,” said Christopher J. Baldwin, Senior Vice President, President North American Commercial Group, The Hershey Company. “Hershey’s chocolate expertise, distribution and selling capabilities combined with the strength of the Starbucks brand will help transform the high-growth premium chocolate segment. Our product development is focused on value-added chocolate and coffee-based products that will provide consumers with a new experience and accelerate growth in this key segment. Customers clearly value the Starbucks brand, and early customer feedback has been outstanding.”
Cocoa beans, like coffee, are an agricultural product that affects the livelihood of many people around the world. Starbucks and Hershey share a passion and focus to purchase cocoa that is socially responsible, economically viable, ecologically sustainable and meets specific quality standards.
“Starbucks and Hershey share a deep dedication to making a positive difference in the communities where they live, work and do business,” said Thomas K. Hernquist, Senior Vice President, Global Chief Growth Officer, The Hershey Company. “We look forward to working together with Starbucks to extend our work that is making a meaningful difference in the lives of farm families in the world’s cocoa growing regions.”
Hershey is committed to promoting sustainable cocoa farming and plays a leadership role with industry partners, governments, international agencies and cocoa communities to develop programs that promote economic and social development and environmental conservation in cocoa-growing communities around the world. Hershey’s cocoa sourcing guidelines will help to improve farmer incomes, ensure responsible labor practices and protect the tropical ecosystem. Hershey also supports organizations such as The International Cocoa Initiative (ICI) and The International Foundation for Education & Self Help (IFESH). Both Starbucks and Hershey support the World Cocoa Foundation.
Starbucks has recently developed its Cocoa Practices Guidelines and Scorecard which are being piloted for a two-year period beginning June 1, 2007. The Cocoa Practices were developed to reflect Starbucks C.A.F.E. (Coffee and Farmer Equity) Practices, the Company’s coffee buying guidelines, and are similar in structure and criteria areas. The program is designed to evaluate and recognize producers of high-quality, sustainably grown cocoa. To become a Cocoa Practices supplier, farmers, processors and exporters must meet minimum requirements and demonstrate best practices which are subject to independent verification under the guidelines. Hershey’s and Starbucks will work together to pilot and implement these practices for this platform. To learn more about Cocoa Practices and Starbucks commitment to sustainable cocoa production, please visit www.starbucks.com/cocoa.
Safe Harbor Statement
This release contains statements which are forward-looking. These statements are made based upon current expectations which are subject to risk and uncertainty. Actual results may differ materially from those contained in the forward-looking statements. Factors which could cause results to differ materially include, but are not limited to: The Hershey Company’s ability to implement and generate expected ongoing annual savings from the initiatives to transform Hershey’s supply chain and advance Hershey’s value-enhancing strategy; changes in raw material and other costs and selling price increases; Hershey’s ability to execute its supply chain transformation within the anticipated timeframe in accordance with its cost estimates; the impact of future developments related to the product recall and temporary plant closure in Canada during the fourth quarter of 2006, including Hershey’s ability to recover costs incurred for the recall and plant closure from responsible third-parties; pension cost factors, such as actuarial assumptions, market performance and employee retirement decisions; changes in Hershey’s stock price, and resulting impacts on our expenses for incentive compensation, stock options and certain employee benefits; market demand for Hershey’s new and existing products; changes in Hershey’s business environment, including actions of competitors and changes in consumer preferences; changes in governmental laws and regulations, including taxes; risks and uncertainties related to our international operations; and such other matters as discussed in The Hershey Company’s Annual Report on Form 10-K for 2006.
About Starbucks
Starbucks Coffee Company provides an uplifting experience that enriches people’s lives one moment, one human being, one extraordinary cup of coffee at a time. To share in the experience, visit www.starbucks.com.
About The Hershey Company
The Hershey Company (NYSE: HSY) is the largest North American manufacturer of quality chocolate and sugar confectionery products. With revenues of nearly $5 billion and more than 13,000 employees worldwide, The Hershey Company markets such iconic brands as Hershey’s, Reese’s, Hershey’s Kisses, and Ice Breakers. Hershey is the leader in the fast-growing dark and premium chocolate segment, with such brands as Hershey’s Special Dark, Hershey’s Extra Dark and Cacao Reserve by Hershey’s. In addition, Artisan Confections Company, a wholly owned subsidiary of The Hershey Company, markets such premium chocolate offerings as Scharffen Berger, known for its high-cacao dark chocolate products, Joseph Schmidt, recognized for its fine, handcrafted chocolate gifts, and Dagoba, known for its high-quality natural and organic chocolate bars. Visit us at www.hersheynewsroom.com.
