The power of consumer-led, grass-roots petitioning shined in Hershey, Pennsylvania when the trust that controls the American candy maker's fate voted 10-7 not to sell the company on September 17th. In the days of mega-mergers that have only slowed their dizzying pace because of a downshifting economy, this is fantastic news.
Even with the pressures placed upon the trust's board members from citizens throughout Hershey, the State of Pennsylvania and beyond, the Wall Street Journal still classified the decision not to sell the company an "astonishing" announcement. Besides Wm. Wrigley Jr. Co., which submitted the highest bid and appeared to meet all the self-professed goals the trust was seeking in a sale, bids were also submitted by Swiss-owned Nestle SA and British-owned Cadbury Schweppes PLC.
Nestle, as it turns out, was fresh off an acquisition of another U.S.-owned company - Chef America, Inc. Chef America is best known for its popular line of Hot Pockets and other frozen foods. And you thought that if a company had "America" or "American" in their name that it was based in the United States?
Although a winning bid by Wrigley would have kept the company American, opponents to the sale argued that any sale would have ultimately had a negative impact on the community. Hershey Foods' president and chief executive Richard H. Lenny consistently argued that the company was of more value if left independent. Opposing this sale was obviously more about American culture, tradition, and values, which are three components that seem to get lost in mergers, acquisitions and buyouts geared towards inflating the bottom line. The fact is that most mergers fail to achieve their desired or anticipated results, much like many of our trade deals with other countries.
Now that even proponents of the sale have admitted that a Hershey sale is off the table indefinitely, the downside is (yes, there are two sides to every story) that the stock price went down and the company must now rely on the growth of their existing brand names. That may be a tall order for a company that already has a 30% share of the U.S. candy market, but being number one in the America is an asset, not a liability.
Consumers can ensure Hershey stays number one, and in fact should reward their principled stance by buying their products. It may seem like an easy decision in your easy chair reading about Hershey's determination to stay independent in the newspaper, but there was a lot of pressure involved. Going against the grain, not to mention a competing bid from the world's largest food company - Nestle - was surely no cakewalk. Patriotic citizens in Pennsylvania now need patriotic action from across the nation.
I would not suggest you necessarily switch from another American-owned candy maker for a Hershey Bar, but next time you get a sweet tooth, make sure you don't reach for a Nestle Crunch. Swiss-owned Nestle, even though they have only 12% of the U.S. chocolate market, is a food giant that could use a little diversification.
So congratulations to all the folks in Hershey and the rest of Pennsylvania that held to their principles in the face of corporate pressures from literally all over the globe. For them, and for all of America, this victory is especially "sweet."