Hershey tuning its ears to customer comments, sets plan for long-term net sales boost
HERSHEY, Pa. The Hershey Co. said it will announce its plan for meeting long-term for net sales goals and increasing earnings per share growth today. The company said that a new plan was developed after Hershey completed a market structure/category segmentation review. The company will also realign its plans to focus on the interests of key consumer segments to help drive growth.
Hershey said it is readjusting its resources and plans to beef up its advertising by about 20 percent in 2008 and 2009. A focus will be directed on core brands currently generating around 60 percent of the company’s U.S. net sales.
“Our extensive consumer research validates our strategy of increasing advertising and consumer investment behind the core U.S. brands that offer the greatest potential for growth,” David J. West, president and chief executive officer said. “We will combine this focused approach with consumer-centric innovation and continued international expansion to achieve our long-term net sales growth rate of 3 to 5 percent. Longer term, as marketplace trends improve and targeted consumer initiatives are executed, the Company expects to generate earnings per share growth of 6 to 8 percent.”
Hershey has said that it estimates its total net growth for 2008 to be at around 3 to 4 percent. Earnings per share were expected to be around $1.85 to $1.90. Hershey’s management planned to discuss the new strategy and long-term goals at a meeting with investors earlier this morning.
Nestle says it will keep its prices steady
VEVEY, Switzerland Due to a price ceiling hit by rising costs of commodities, Swiss food maker Nestle will most likely not raise prices of its products any higher in the near term, the company’s chairman said Sunday.
“You are now seeing the impact of price increases which were done some months ago,” Peter Brabeck-Letmathe, Nestle S.A. chairman, said to Dow Jones Newswires. “I would expect [the rising costs of foods] to flatten out over the next several months and not increase anymore as our costs have come down.”
Brabeck-Letmathe was in Malaysia attending the World Economic Forum on East Asia. He said “the worst is probably past” for surges in the costs of raw ingredients such as milk, coffee, salt and cocoa.
Brabeck-Letmathe also said that his company will probably not make any acquisitions any time soon because there aren’t many attractive deals in the horizon. He also reported that Nestle doesn’t have a firm decision to sell its 29 percent hold in L’Oreal, however, it may review the idea some time next year.
Coca-Cola announces debut of new bottle design in select cities
BIRMINGHAM, Ala., and CHATTANOOGA, Tenn. Two U.S. cities will be the launch sites of Coca-Cola’s newly redesigned, “iconic contour” two-liter bottle, Coca-Cola Company has said.
Coca-Cola said that it selected Birmingham and Chattanooga to launch the contoured bottles because of their “long-standing loyalty to the soft drink,” and because bottler Coca-Cola United is located in Birmingham.
Coca-Cola also said the new “iconic” shape of the two-liter bottle was selected over a straight version in consumer tests. The company said that consumers reported the contoured bottle is easier to hold and pour from, and they said the new design would boost sales.
The new bottle debuts in stores today. All of Coca-Cola’s brands will soon be available in the new bottle.