496 Part 5: Cases

Case 16
The Hershey Company’s Bittersweet Success*

Introduction
Chocolate is enjoyed by millions, mainly in decadent desserts, candies, and drinks. Demand
for dark chocolate, chocolate with at least 70 percent cocoa, has grown due to its health
benefits, such as reducing blood pressure, improving blood flow, and increasing good cho-
lesterol. Developing countries are discovering that cocoa beans improve their sweet treats
and candies, thus creating even greater worldwide demand. Cocoa beans grow mostly in
tropical climates, mainly in West Africa, Asia, and Latin America, with the largest exporters
being Ghana and the Ivory Coast.
With more than $8 billion in annual sales, the Hershey Company is one of the world’s
largest producers of chocolate and candy products. Hershey’s products are sold in more
than 70 countries and include Hershey’s Kisses and Hershey’s Milk Chocolate Bars, as well
as brands such as Reese’s, Whoppers, Almond Joy, and Twizzlers. Although Hershey strives
to be a model company and has several philanthropic, social, and environmental programs,
the company has struggled with ethical problems related to labor issues, such as child labor,
in West African cocoa communities. Hershey has developed several initiatives to improve
the lives of West African cocoa workers and supports a number of organizations that are
involved in cocoa communities. However, critics argue that Hershey is not doing enough to
stop labor exploitation on cocoa plantations. This case examines some of the issues related
to the Hershey Chocolate Company and West African cocoa communities.

Hershey’s History
The Hershey Chocolate Company was founded in 1894 by candy manufacturer Milton
Hershey in Lancaster, Pennsylvania. Hershey’s chocolate business started off as a side
project, a way to create sweet chocolate coatings for his caramels; however, the company
soon began producing baking chocolate and cocoa and then selling the extra product to
other confectioners. The successful sale of Hershey’s excess products was enough to make
the chocolate department its own separate entity.
Despite the company’s immediate success, Milton Hershey still craved more chocolate,
especially milk chocolate. At the time, milk chocolate was perceived as a treat only the
wealthy could afford to enjoy. Hershey set out to find a less expensive way to produce milk
chocolate while still maintaining its quality. In 1896, Hershey bought a milk processing
plant in Derry Township, Pennsylvania, and began working day and night until 1899 when
he created the perfect milk chocolate recipe—a recipe that could be manufactured cheaply
and efficiently while maintaining a high level of quality. The company soon opened a factory
and began introducing new chocolate treats. The most popular of these was the Hershey’s
Kiss, a small dollop-shaped chocolate candy wrapped in foil.

*This material was developed by Kelsey Reddick, Dianne Kroncke, Harper Baird, Shelby Wyatt, Sarah Sawayda, and
Zachary Youngstrom under the direction of O. C. Ferrell and Linda Ferrell, © 2022. It is intended for classroom
discussion rather than to illustrate effective or ineffective handling of administrative, ethical, or legal decisions by
management.

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 Case 16: The Hershey Company’s Bittersweet Success 497

The Hershey’s Kiss was only the beginning. Hershey soon came out with Mr. Goodbar
and Krackel, both of which remain popular today. In 1923, Hershey began collaborating
with another famous confectioner: H. B. Reese. H. B. Reese was a former employee at the
Hershey Company who started his own candy company that focused on a single product,
the peanut butter cup. Due to his ties with the Hershey Company, the chocolate coating for
Reese’s peanut butter cups was supplied by Hershey.
The Hershey Chocolate Company continued to expand throughout the mid-twenti-
eth century. The company’s entrepreneurial spirit continued after Milton Hershey’s death
in 1945. The company acquired several other firms, including Reese’s, and was renamed
the Hershey Foods Corporation in 1968. The company changed its name to the Hershey
Company in 2005. Today, Hershey employs more than 21,000 people worldwide, with the
company headquarters in Hershey, Pennsylvania. In March 2017, Michele Buck was named
president & CEO, making her Hershey’s first female chief executive. She was later named to
Fortune’s “50 Most Powerful Women” list.
Hershey now includes the following brands: Hershey’s, Kisses, Reese’s, Kit Kat,
5th Avenue, Almond Joy, Brookside, Cadbury, Heath, Mounds, Mr. Goodbar, Krackel,
Whatchamacallit, Skor, Symphony, York, Whoppers, Allan, Good & Plenty, Jolly
Rancher, Pelon Pelo Rico, Twizzlers, Breath Savers, Bubble Yum, ICE BREAKERS, Milk
Duds, PAYDAY, Rolo, Zagnut, and Zero. In September 2018, Hershey acquired Pirate
Brands—which includes Pirates Booty, Smart Puffs, and the Original Tings—for $42
million and Amplif—the parent company of SkinnyPop—for nearly $1 billion.
After more than 125 years of business, Hershey is still innovating. The company
plans to make a larger dent in the $88 billion snacking industry by introducing more
snack products, evidenced by its acquisition of SkinnyPop’s parent company, Amplify,
Hershey’s largest acquisition to date. Hershey is evolving to accommodate changing
consumer preferences, including changes in the way people shop. In 2019, Hershey
introduced stand-up packaging that was designed to look good on the shelf in a store
as well as appear appealing on mobile devices. By encouraging retailers to implement
creative cross-selling solutions to their e-commerce platforms that encourage shoppers
to add candy to their carts, Hershey hopes to appeal to shoppers who purchase groceries
online and order in bulk.
Thanks to Milton Hershey, the company has a long history of philanthropy and stew-
ardship. He supported education, building the Milton Hershey School, a private school for
lower-income children. He also built parks and a hospital, as he put his employees’ well-
being over his personal profits. At the time of his death, he bequeathed most of his estate to
the Milton Hershey School.

Ethics, Values, and Social Responsibility

Hershey’s commitments to its stakeholders through ethical behavior are outlined in the
Code of Conduct. The code covers issues such as reporting misconduct, conflicts of
interest, human rights, product quality, and diversity. The company encourages ethics
reporting through a variety of channels, including management, human resources,
executives, and third-party reporting. All employees go through ethics training and certify
their adherence to the code every year. Hershey’s Ethical Business Practices Committee
provides oversight and guidance in all ethical issues at the company.

Values
Hershey has four core values:
1. Open to Possibilities: Fostering diversity, seeking new approaches, and striving for
continuous improvement.
2. Growing Together: Sharing knowledge and capitalizing on employee potential in an
environment of mutual respect.

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498 Part 5: Cases

3. Making a Difference: Leading with integrity and determination to have a positive

impact on everything we touch.
4. One Hershey: Succeeding together while accepting individual responsibility for driv-
ing results.

Corporate Social Responsibility Strategy

Hershey’s corporate social responsibility (CSR) strategy, called the Shared Goodness prom-
ise, centers on engaging with the company’s stakeholders and continually improving its CSR
performance. The company also incorporates its values into its programs and initiatives. The
company believes that “The Hershey Company’s commitment to CSR is a direct reflection
of our founder’s life-affirming spirit.” Hershey uses its value chain to categorize its social
responsibility activities into four groups: Shared Futures, Shared Planet, Shared Business,
and Shared Communities.

Shared Futures Hershey’s Shared Futures pillar focuses on helping children succeed
through education and nutrition. Hershey introduced The Heartwarming Project to help
children build meaningful connections while promoting inclusivity and empathy. Hershey
partnered with organizations such as The Boys & Girls Club of America and WE Charity to
reach more than six million children in the program’s first year.
Additionally, Hershey aims to bring nourishment to children around the world with
a variety of nutrition programs. Hershey provides ViVi, a fortified nutritional supplement,
to students in Ghana to improve nutrition as well as increase school attendance. A study by
the University of Ghana showed that anemia rates decreased and attendance rates improved
in the 57,700 children that received ViVi daily. Also, Hershey partnered with Annamrita,
a nonprofit in India, to provide school lunches to more than 6,400 children. Additionally,
they conducted an assessment of the nutrition of children in underserved areas of Mumbai
with the purpose of creating a snack to address any nutritional needs identified. These
efforts, among others, demonstrate Hershey’s commitment to improving access to food and
nutrition in its communities worldwide.

Shared Planet Maintaining the environment is important to Hershey, and it is taking

many steps to reduce its impact on the environment, including sustainable product designs,
sustainable sourcing, and efficient business operations. Some specific programs include the
following:
• Sustainable palm oil sourcing: Palm oil comes from the African oil palm tree and is
used in a wide variety of products, including Hershey’s chocolate. However, the produc-
tion of palm oil is highly controversial because of its impact on ecosystems. To combat
concerns, Hershey became a member of the Roundtable of Sustainable Palm Oil (RSPO)
and purchases palm oil only from suppliers that are also RSPO members.
• Sustainable paper: Hershey purchases paper for its office from suppliers that use sus-
tainable forestry practices and are Forest Stewardship Council or Sustainable Forestry
Initiative certified.
• Recyclable packaging: More than 80 percent of Hershey’s packaging is recyclable,
including syrup bottles, foil, paper wrappers, and boxes. Additionally, Hershey aims to
reach a company-wide recycling rate of 95 percent by 2025.
• Zero- waste-to-landfill facility: The Reese’s manufacturing plant is a zero-waste-to-
landfill facility, meaning that none of the plant’s routine waste goes to a landfill. Today,
15 Hershey manufacturing plants and facilities have achieved zero waste-to-landfill. The
waste that is not recycled goes to an energy incinerator and is used as a source of fuel.

Shared Business Hershey strives to conduct business fairly and ethically by focusing
on the integrity of its supply, consumer well-being, and alignment with customers. For
Hershey, the integrity of supply includes not only the ingredients but also the people and

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 Case 16: The Hershey Company’s Bittersweet Success 499

processes used to grow, process, and acquire those ingredients (the entire supply chain).
Cocoa is of particular concern to Hershey, and the company is involved in a number of
cocoa-sector initiatives and partnerships to make progress in sustainable cocoa farming and
fair labor. These issues are explored in greater detail later in this case.
The company sponsors several consumer health initiatives and programs, including
Moderation Nation, a national consumer education initiative that promotes balanced life-
styles, which is sponsored by the Hershey Center for Health & Nutrition (HCHN) and the
American Dietetic Association (ADA). The company also hosts Hershey’s Track and Field
Games across the United States to encourage children ages 9–14 to engage in sports and a
healthy lifestyle.

Shared Communities
Hershey’s idea of shared communities begins with employee engagement and volunteerism
and extends to investing in the communities in which Hershey operates. Hershey wants to
provide value to employees and make the company a desirable place to work by focusing
on safety, wellness, openness, and inclusion. The company has strong diversity policies and
focuses on continuous safety improvements in its manufacturing facilities. Hershey has
continued to improve its workplace practices. The firm launched an initiative called the
Manufacturing Apprenticeship Program to recruit, train, and retain employees with physical
or intellectual disabilities for its manufacturing plants. Hershey was named one of the “Best
Places to Work for LGBTQ Equality” by the Human Rights Campaign.
Hershey’s biggest philanthropic contribution is through the Milton Hershey School.
Milton Hershey and his wife, Catherine, started the school in 1909 to help orphan boys
receive an education while living in a nurturing environment that included meals and
clothes. The school was a cause dear to the couple’s heart because they were unable to have
children of their own. After his wife’s death, Milton Hershey created the Hershey Trust Fund,
to which he donated most of his money to be used for the support of the school. To this day,
the fund remains the company’s biggest shareholder and largest beneficiary. It holds a 30
percent stake in Hershey.
Hershey also donates to and supports more than 1,400 organizations, including the
American Red Cross, Habitat for Humanity, Junior Achievement, Dress for Success, and
the Children’s Miracle Network. The company has also designed a way to get its employees
involved in the community. Hershey created a program called “Dollars for Doers” in which
employees who participate in 50 hours of community service over one year are rewarded
$250 by the company to donate to an organization of their choice.
In response to the COVID-19 pandemic in 2020, Hershey made efforts to support its
employees and communities at large. For instance, in its manufacturing facilities, Hershey
implemented increased safety measures such as providing gloves, hand sanitizer, and
masks along with infectious disease prevention guidelines. The company also provided
manufacturing and retail employees the option to stay at home during the outbreak while
creating incentives for team members that were willing to work. The company worked with
organizations such as United Way Worldwide and Feeding America, donating millions of
dollars in cash, product, technical expertise, and resources to COVID-19 response efforts.
Hershey products were donated to hospitals to lift the spirits of those impacted by the virus.
Hershey made these efforts despite facing a sales slump. For instance, Easter candy sales in
the candy industry were severely impacted as consumers saved more and spent less, and
there were fewer gatherings to celebrate the holiday.

Board Changes
Despite its strong record of social responsibility, in 2016, Hershey experienced a board
upheaval when the Hershey Trust Company settled with the Pennsylvania attorney gen-
eral’s office. The attorney general’s office investigated concerns that board members were
overpaid, received reimbursements for excessive travel expenses, and exceeded 10-year term

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500 Part 5: Cases

limits. There were also questions about whether board members of the trust were acting in
the best interests of the Milton Hershey School. The board had rejected different offers by
other firms to acquire Hershey. The local community of Hershey, Pennsylvania, encouraged
Hershey to remain independent, but some believed that selling the company would have
been the most beneficial option for the school. The Hershey Trust holds 81 percent of the
voting power, which gives it the power to control votes on mergers or acquisitions.
The allegations were serious enough that Hershey agreed to make corporate governance
changes. Some of the board members resigned. In addition, Hershey developed a legal docu-
ment that caps board member terms as well as compensation. This lapse in corporate gover-
nance was a slight blow to Hershey’s reputation, but it also offered the firm an opportunity
to learn from its mistakes and develop more sound leadership for the future.

Labor Issues in the Cocoa Industry

Although The Hershey Company strives to engage in ethical and responsible behavior, the
realities of the cocoa industry present several ethical challenges related to the fair and safe
treatment of workers, especially children. Chocolate is one of the world’s most popular con-
fections, but few people consider the sources of the chocolate they consume.
The process of making chocolate spans several countries and companies even before the
ingredients arrive at the manufacturing plant. It starts with the cocoa bean, which is found
within the Theobroma cacao, also known as the cocoa pod (fruit). The harvest process is
labor intensive and starts when the seeds (cocoa beans) are extracted by splitting the pod
with a machete. Each pod can contain anywhere from 20 to 50 beans, and around 400 beans
are needed to produce one pound of chocolate. After the beans have been extracted, they are
laid out to dry in the sun for several days in order to acquire the flavor needed for chocolate.
The beans are then packed into bags and sent out for shipment.
The cocoa bean supply chain is extensive and elaborate; at times, the cocoa bean can
go through up to 12 different stages before getting to the chocolate manufacturers, and the
price per pound of cocoa beans changes significantly throughout the supply chain. By the
time the beans reach the chocolate manufacturers, they are a mix of beans from hundreds
of cocoa plantations.
Although the process of manufacturing chocolate requires many steps before it can
begin, most of the major ethical and legal issues are related to the source of the cocoa bean.
Cocoa plantations are found in areas with rainy, hot, tropical climates and high amounts of
vegetation. The global cocoa market is currently supplied mostly by less developed countries,
with 70 percent supplied by Africa (Ivory Coast, Ghana, Nigeria, and Cameroon). The Ivory
Coast supplies 40 percent of the entire global market, and Ghana supplies 20 percent. This
is followed by 19 percent from Asia and Oceania (Indonesia, Papua New Guinea, Malay-
sia), and 11 percent from South America (Ecuador, Brazil, Colombia). With the majority
of the global cocoa supply coming from Africa, the need for workers on plantations never
dwindles. This has brought about the booming business of child labor, slavery, and human
trafficking across African borders. Many cocoa farms do not own the cocoa plantation and
pay the landowner 50 to 66 percent of each year’s crop. To keep costs low, farmers often use
their own family members as a source of labor.
Children who work on cocoa plantations are usually somewhere between 12 and 15
years old but can be as young as 5 years old. Many of them work in hazardous conditions
on the plantations, with workdays often lasting eight to twelve hours. Poverty in the Ivory
Coast and Ghana causes parents to rely on their children to help provide for the family’s
basic survival. The average number of children in a household range from 5 to 17. Chil-
dren work in all segments of cocoa production including land preparation, planting, farm
maintenance, harvesting, and post-harvest. They clear land, spray insecticides, and apply
fertilizers and fungicides.
It is not uncommon for traffickers to abduct small children from the neighboring
­African countries of Burkina Faso and Mali, some of the poorest countries in the world.

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 Case 16: The Hershey Company’s Bittersweet Success 501

Boys are sent to the fields, often in hot, humid conditions with little food and water. They
are taught to use chainsaws to cut through the forest, while others climb and work on trees
higher than 9 feet. They use machetes to cut the cocoa bean pods, and then they put the
pods in sacks that weigh up to 100 pounds. The children are then required to either drag
or carry the sacks out of the forest. Other children receive the pods and use their machetes
or cutlasses to open the pod’s hard shell to harvest the cocoa beans. Once the cocoa seeds
have been removed, young girls assist women in processing or grinding the beans by hand.
Some girls work on the farms for a few months, while others stay for the rest of their lives.
This labor-intensive operation has been done by hand for centuries. Along with the physi-
cal demands, workers experience poor health services, little access to drinkable water, food
insecurity, and lack of education.
Insect and pest control is a major problem for the growers. To mitigate this issue, chil-
dren are sent to spray the pods with large amounts of industrial and toxic chemicals and
pesticides, without the benefit of protective clothing. Exposure to these poisons creates
damage to their neurological and physical development.
Although governments and corporations are aware of this problem, no accurate infor-
mation, aside from estimates, exists regarding the true number of children working on cocoa
plantations. The difficulty of obtaining accurate data can be attributed to the immense quan-
tity of cocoa plantations across Africa, totaling substantially more than 1,000,000 small
plantations (average size 2 to 4 hectares), with between 600,000 and 800,000 plantations
located throughout the Ivory Coast.
Nonetheless, it is estimated that two-thirds of African farms use child labor. According
to surveys conducted by both Tulane University and the Government of the Ivory Coast, an
estimated 819,921 children in the Ivory Coast alone are working in some area of the cocoa
business.
In addition to child labor, many cocoa plantations engage in the exploitation of other
workers. While some non-family workers are paid, others may be enslaved or may work in
abusive conditions. They may have been trafficked from neighboring countries or tricked
into owing large amounts of money to their employers. The workers are often threatened
with physical punishment or death if they attempt to leave the plantation. Hershey intro-
duced a human rights policy in 2019 as a sign of its commitment to human rights issues in
the supply chain such as child labor, women's rights and empowerment, living wage and
income, and forced labor. The goal of the policy is to create awareness around human rights
issues across the company, identify training needs, and improve the company's supplier code
conduct and social audit program.

Global Help and a Little Green Frog

The issues of child labor, human trafficking, and forced labor in West Africa have drawn the
attention of many organizations, as well as the companies that procure products from that
region. They have implemented many different initiatives, laws, and other precautionary
measures in order to reduce the use of children for cocoa farming in terms of manual labor.
In Africa, individuals younger than 14 are not allowed by law to work within the business
sector, which does not include family farms. This law seems to be effective, but in reality, it
does almost nothing when considering the large number of family cocoa farms and the ease
of hiding non-family laborers.
To help change labor practices without relying on governmental or legal support, several
organizations are working to encourage the ethical sourcing of cocoa. Most of these organi-
zations focus on the fair treatment and education of cocoa producers and raising voluntary
support from companies. The following are some of the global organizations and programs
that are working to combat the labor problem within the cocoa industry:
• World Cocoa Foundation (WCF): An organization devoted to improving cocoa farm-
ers’ lives through sustainable and responsible cocoa farming practices.
• Sustainable Tree Crops Program (STCP): Farmers learn to improve their cocoa crop
yields and earn more money through nine-month field training courses.

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502 Part 5: Cases

• Harkin-Engel Protocol: An initiative enacted in 2001 to commit the chocolate industry

to fight the worst cases of child labor. The agreement was signed by eight chocolate
manufacturers, including The Hershey Company.
• International Cocoa Initiative (ICI): An independent foundation established in 2002
under the Harkin-Engel Protocol to address the worst forms of child labor and adult
forced labor on cocoa farms in West Africa. The organization works to inform and
educate communities on child labor and how to create community-based solutions.
• International Labor Organization (ILO): An organization working to combat the
various child labor-related problems within West Africa. The different programs ini-
tiated by the ILO have focused on creating sustainable ways of removing children
from child labor in the cocoa business, improving community initiatives to fight
child labor, and increasing overall income for the adult sector to prevent the need
for child labor.
The International Cocoa Organization was established in 1973 by the United Nations.
Membership is composed of cocoa producers and representatives from countries that import
cocoa. It developed seven formal economic agreements that address funding of projects,
sustainable development, disputes, consultations, and research and marketing. It also estab-
lished a set of standards for a “Sustainable World Cocoa Economy.”
Today, there are three main certifying organizations for cocoa: Fair Trade USA, UTZ,
and Rainforest. Their missions are to provide assurance that the product is produced in a
sustainable manner. They have a formal “Code of Conduct” and “Certifications” that address
farming methods, working conditions, and care of the environment.

Fair Trade USA

Fair Trade Certified is a nonprofit organization that was founded in 1981 by the Institute
for Agricultural Trade Policy and involves a network of producers, companies, consumers,
and organizations that are concerned about the environment and making people a priority.
Fair Trade sets standards and criteria that protect ecosystems and stipulate farmers work
in safe conditions and receive a harvest price while protecting the environment. Fair Trade
guarantees a minimum price to farmers and a guaranteed premium payment per ton. While
this is an improvement in financial remuneration to the farmers, it is still not enough to
eliminate poverty for families. Their certification provides child labor monitoring, as well
as remediation programs for those farmers who are caught abusing child labor laws. Fair
Trade USA was a member of Fairtrade International until September 2011, when it resigned
its membership because of disagreements as to the “best paths forward” in its certification
and expansion missions.
Today, more than two billion people live on less than two dollars a day according to U.N.
poverty statistics. Fair Trade created Co-Op Link to provide cooperatives with funding for
capital access and increased quality standards. It also limits child labor, the use of pesticides,
herbicides, and genetically modified products (GMOs), and establishes standards for con-
tracts and importers that must be met before certification. It also allows a set of standards
for democratic decision making, so farmers will have an opportunity to have input into how
the Fairtrade premiums are invested.

Universal Trade Zone

Universal Trade Zone (UTZ) was founded in 2002 as UTZ Kapeh, or “good coffee,” by Nick
Bocklandt, a Belgian-Guatemalan coffee grower, and Ward de Groote, a Dutch coffee roaster.
Both men were committed to implementing sustainable farming practices. In October 2007,
cocoa certifications were added. Today, more than 750,000 cocoa farmers from 21 countries
producing 1.5 million tons of cocoa are now UTZ certified. UTZ has a “Certified Code of
Conduct” and includes traceable growing practices that address farm management, farming
practices, labor and living conditions, and the environment. UTZ is also a full member of
the ISEAL Alliance, the global sustainability standards association.

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 Case 16: The Hershey Company’s Bittersweet Success 503

Rainforest Alliance
Rainforest Alliance ensures that agriculture, rain forests, and farmworkers and their families
meet standards that protect against environmental and social hazards. Cocoa certified by
the Sustainable Agriculture Network (SAN)/Rainforest Alliance makes up more than 13.4
percent of the world’s cocoa supply. SAN is a nonprofit conservation organization that has
partnered with the Rainforest Alliance to help sustainable cocoa farming become main-
stream. The SAN/Rainforest Alliance certification program was created to protect natural
ecosystems and teach farmers about sustainable agricultural principles. This includes how
to protect against insect infestations, prevent disease of cocoa trees, and implement safe
farming techniques that protect workers as well as the environment.
Rainforest Alliance addresses the use of child labor by prohibiting minors younger than
15 years of age from working on the farms as part of its certification process. Young people
between 15 and 18 are allowed to work but are restricted in the tasks they are allowed to
perform. It also ensures that workers have access to education for their children along with
access to medical services for farmers, workers, and their families.
On January 9, 2018, the Rainforest Alliance officially merged with UTZ. The certifica-
tion merger includes coffee, cocoa, tea, and hazelnuts. With 182,000 farmers being certified
in one or both of the organizations, the merger created the largest certification organization
in the world. This merger also reduced administrative costs and duplications in the first
year as each organization continued with its separate and standard certifications and audits.
In 2019, a new single program was instituted and marketed as a single certification brand.
Currently, neither UTZ nor Rainforest has a system that protects farmers from market fluc-
tuations or addresses fixed premiums for farmers.

Hershey’s Efforts to Improve Labor Conditions

Hershey has made several commitments to help mitigate labor issues in its supply chain and
in the chocolate industry. Hershey is involved in West Africa and the organizations that fight
child labor in West African cocoa farming. The company is a member of the WCF and the
ICI, and it is one of the eight corporations that signed the Harkin-Engel Protocol. Involve-
ment in these programs and organizations requires Hershey to commit to certain standards
and contribute to fighting child labor. Hershey instituted the Raise the Bar campaign as part
of its transition to using certified cocoa under its 21st Century Cocoa Plan. Hershey made
a commitment to source its cocoa through UTZ, Fairtrade USA, and Rainforest Alliance by
2020, a goal that the company achieved.
The Hershey Company is dedicated to sustainably and ethically supplying the cocoa
needed for its products, as well as educating its suppliers. One program that integrates
these two concepts is Hershey’s CocoaLink program. CocoaLink uses mobile technology
to share practical information with rural cocoa farmers. Farmers receive free text or voice
messages that cover topics such as improving farming practices, farm safety, child labor,
health, crop disease prevention, post-harvest production, and crop marketing. Farmers
can also share information and receive answers to specific cocoa-farming questions. Her-
shey also supports Learn to Grow farm programs in countries such as Ghana and Belize.
In Ghana, the program provides local farmers with information on best practices in sus-
tainable cocoa farming, and in Belize, the program supports sustainable sugar refining
on sugar cane farms.
In 2016, Hershey initiated the One for All Cacao Project, with its Dagoba brand organic
chocolate. The Project’s mission is to advance women and to assist in the economic develop-
ment of cacao farming communities. Women are taught management skills and customized
farming techniques that enable a sustainable environment. Hershey also supports Women in
Cocoa and Chocolate Network, a program that supports women farmers, who now make up
a quarter of the cocoa farm population in West Africa. This organization provides extension,
business management, and certification services. It works to improve the economic lives
in the cocoa communities as well as empower women throughout the cocoa supply chain.
One of Hershey’s latest endeavors, The Cocoa for Good campaign, was introduced to West

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504 Part 5: Cases

African farming communities. Hershey pledged $500 million by 2030 to address the cocoa
community’s issues of poverty, lack of nutrition, child labor, at-risk youth, and sustainable
ecosystems.

Criticism of Hershey’s Efforts

Some critics argue that Hershey is not doing enough to combat labor exploitation and
improve communities in West Africa. Over the past few years, Mars, Mondelez, Nestlé,
Cargill, and other competitors have worked to adopt fair trade certification and/or release
information regarding their suppliers. Despite many requests for public disclosure of its
cocoa suppliers, Hershey still declines to name them. It is well known that Hershey acquires
most of its cocoa from West Africa, but the specific sources are more difficult to identify.
Though Hershey achieved its goal of sourcing 100 percent of its cocoa from certified
and sustainable sources (free from child labor) in 2020, the company still has obstacles to
overcome. Green America developed a Big Chocolate Scorecard to grade chocolate manu-
facturers on the sustainability of their supply chains. Hershey ranked behind Tony’s Choco-
late, Lindt, and Ferrero Rocher. According to the scorecard, Green America believes there
is room for improvement for Hershey regarding deforestation and climate change, living
income, and child labor.
Through the years, Hershey has addressed numerous litigations regarding child labor,
human rights, and abuse of civil liberties in its supply chains, particularly in developing
countries. Two class-action lawsuits were filed against Hershey in 2018, alleging The Hershey
Company and Mars knowingly imported cocoa beans from the Ivory Coast, a country that
uses child labor, slave labor, and child trafficking. The lawsuits also contended that Hershey
failed to address these issues with suppliers. Though the lawsuits were dismissed in 2019,
a similar lawsuit was filed by Perkins Coie, an international law firm, on behalf of three
California residents who alleged the Hershey Company, along with the Mars and Nestlé
Company, committed false advertising by failing to disclose the use of child slavery on their
packaging. The suit sought monetary damages for California residents who purchased the
chocolate. They also petitioned to revise the Hershey packaging to acknowledge that child
slaves were used in the production of the product. The First Circuit refused to hear the case
in 2020; however, Hershey, due to the nature of the cocoa supply chain, will likely face similar
litigation in the future.

Conclusion
The labor issues in the chocolate industry are complex and connected to poverty within West
Africa. The exploitation of cocoa communities is intertwined with the meager incomes for
the majority of the population, a lack of education and opportunity, government corruption,
and other conditions in the region. With millions of children used in cocoa production just
in the Ivory Coast, the magnitude of this corruption is vast. Improving the overall well-being
of West Africa is an important part of any attempt to effectively fight the problems associated
with labor cocoa plantations.
The Hershey Company recognizes the need to improve labor conditions in the supply
chain and has developed several initiatives to help create positive change in the cocoa indus-
try. However, despite the company’s large financial contributions, it trails behind competitors
on efforts to address sustainability, poverty, and child labor. On the other hand, the company
appears to have improved significantly in combatting child labor as it reached its goal to
source 100 percent of its cocoa from certified and sustainable sources.
In the end, labor exploitation in the chocolate industry cannot be solved by one com-
pany alone. There are many possible solutions, and it will take many years and a large
amount of investment from the chocolate industry before conditions change. However, by
making small changes to West African cocoa communities, the quality of life for thousands
of cocoa workers will slowly improve.

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