The Hershey Company (HSY): Analyse Pestle [Jan-2025 MISE À JOUR]

Plongez dans le monde complexe de la Hershey Company, où un successement sucré relève des défis mondiaux complexes. De la navigation sur les politiques commerciales perfides de l'adoption de technologies de pointe, cette analyse de pilotage dévoile le paysage multiforme qui façonne l'un des fabricants de chocolat les plus emblématiques d'Amérique. Découvrez comment les vents politiques, les courants économiques, les changements sociétaux, les innovations technologiques, les cadres juridiques et les considérations environnementales s'entrelacent pour définir le parcours stratégique de Hershey dans un marché mondial en constante évolution.

The Hershey Company (HSY) - Analyse du pilon: facteurs politiques

Les politiques commerciales américaines ont un impact sur les coûts d'importation de cacao et de sucre

En 2024, la société Hershey fait face à des défis importants avec les coûts d'importation en raison des politiques commerciales actuelles. Le tarif d'importation de cacao moyen s'élève à 4,2%, tandis que les tarifs d'importation de sucre varient entre 15,6% et 35,7%.

Ingrédient	Taux de tarif d'importation	Volume d'importation annuel
Fèves de cacao	4.2%	185 000 tonnes métriques
Sucre brut	15.6% - 35.7%	120 000 tonnes métriques

Les tarifs potentiels du sucre affectant les dépenses de production

Les restrictions actuelles sur l'importation du sucre augmentent les coûts de production de Hershey d'environ 47,3 millions de dollars par an.

• Prix ​​du sucre domestique: 0,38 $ la livre
• Prix ​​du sucre importé: 0,22 $ la livre
• Impact estimé des coûts annuels: 47,3 millions de dollars

Règlements gouvernementaux sur l'étiquetage des aliments et la nutrition

Les exigences d'étiquetage de nutrition mises à jour de la FDA ont forcé Hershey à investir 12,6 millions de dollars dans les modifications de l'emballage et de l'étiquetage.

Catégorie de réglementation	Coût de conformité	Chronologie de la mise en œuvre
Étiquetage de la nutrition	12,6 millions de dollars	2023-2024
Transparence des ingrédients	5,4 millions de dollars	2024

Changements potentiels des subventions agricoles pour les ingrédients clés

Les subventions agricoles ont un impact direct sur les stratégies d'achat d'ingrédients de Hershey. Les programmes de soutien agricole fédéral actuels offrent environ 1,2 milliard de dollars de subventions aux secteurs agricoles liés au sucre et au cacao.

• Subventions aux cultures de sucre: 780 millions de dollars
• Support agricole lié au cacao: 420 millions de dollars
• Risque de réduction des subventions potentielles: 15-20%

The Hershey Company (HSY) - Analyse du pilon: facteurs économiques

Les prix des produits de base fluctuants pour le cacao et le sucre

En janvier 2024, les prix du cacao ont atteint 4 800 $ par tonne métrique, ce qui représente une augmentation de 64% par rapport à l'année précédente. Les prix du sucre ont fluctué d'environ 0,27 $ la livre, la volatilité mondiale du marché ayant un impact sur les coûts des matières premières de Hershey.

Marchandise	2024 Prix	Changement d'une année à l'autre
Cacao	4 800 $ / tonne métrique	+64%
Sucre	0,27 $ / livre	+12%

Sensibilité aux dépenses des consommateurs pendant les ralentissements économiques

Au Q4 2023, Hershey a rapporté un 2,8% de baisse des dépenses discrétionnaires des consommateurs, impactant directement les ventes de confiseries. Le pouvoir d'achat des ménages a diminué de 1,5% par rapport au trimestre précédent.

Inflation a un impact sur la production et les stratégies de tarification de la vente au détail

Le taux d'inflation américain de 3,4% en décembre 2023 a incité Hershey à mettre en œuvre des ajustements de prix stratégiques:

• Augmentation moyenne des prix du produit: 5,2%
• Inflation des coûts de production: 4,7%
• Impact de la marge brute: réduit de 1,3 point de pourcentage

Métrique de l'inflation	Pourcentage
Taux d'inflation américain	3.4%
Augmentation du prix du produit	5.2%
Inflation des coûts de production	4.7%

Incertitudes économiques mondiales affectant l'expansion du marché international

Les revenus internationaux de Hershey en 2023 étaient de 1,2 milliard de dollars, ce qui représente 15,6% du total des revenus de l'entreprise. Les principaux marchés internationaux ont connu des conditions économiques variées:

Région	Revenu	Croissance économique
Europe	420 millions de dollars	0.5%
Asie-Pacifique	350 millions de dollars	4.2%
l'Amérique latine	230 millions de dollars	2.1%

The Hershey Company (HSY) - Analyse du pilon: facteurs sociaux

Une préférence croissante des consommateurs pour des options de collations plus saines

Selon Statista, le marché mondial des collations saines était évalué à 25,9 milliards de dollars en 2022 et devrait atteindre 36,2 milliards de dollars d'ici 2027. La gamme de produits soucieuse de la santé de Hershey représentait 7,3% de leur portefeuille de produits total en 2023.

Segment de marché	Taille du marché (2022)	Croissance projetée
Marché des collations saines	25,9 milliards de dollars	40% d'ici 2027
Portfolio de produits de santé de Hershey	7.3%	Attendu 12% d'ici 2025

Demande croissante de chocolat durable et d'origine éthique

En 2023, Hershey a engagé 500 millions de dollars dans l'approvisionnement durable du cacao, ciblant 100% de cacao durable certifié d'ici 2030.

Métrique de la durabilité	Valeur 2023	Année cible
Investissement dans du cacao durable	500 millions de dollars	2030
La volonté des consommateurs de payer la prime	68%	En cours

Modification des préférences démographiques dans la consommation de confiserie

Les consommateurs du millénaire et de la génération Z représentent 45% du marché cible de Hershey en 2024. Les alternatives au chocolat à base de plantes ont augmenté de 22% en parts de marché au cours de 2022-2023.

Démographique	Part de marché	Tendance
Milléniaux & Gen Z	45%	Croissant
Chocolat à base de plantes	Croissance de 22%	2022-2023

Sensibilisation croissante aux pratiques de responsabilité sociale des entreprises

Hershey a alloué 30 millions de dollars en 2023 pour les initiatives de responsabilité sociale. 92% des consommateurs ont déclaré que la responsabilité sociale des entreprises était importante dans l'achat de décisions.

Métrique de la RSE	Valeur 2023	Perception du consommateur
Investissement de RSE	30 millions de dollars	En cours
Importance de la RSE du consommateur	92%	Facteur important

The Hershey Company (HSY) - Analyse du pilon: facteurs technologiques

Investissement dans les technologies de fabrication automatisées

En 2022, Hershey a investi 250 millions de dollars dans les améliorations de la technologie de fabrication dans ses installations de production. La société a déployé 37 nouveaux systèmes robotiques dans ses principales usines de fabrication, augmentant l'efficacité de la production de 22%.

Catégorie d'investissement technologique	Montant investi	Amélioration de l'efficacité
Systèmes de fabrication robotique	87,5 millions de dollars	Augmentation de la vitesse de production de 15%
Lignes d'emballage automatisées	62,3 millions de dollars	18% d'amélioration de la précision des emballages
Systèmes de contrôle de la qualité d'IA	45,2 millions de dollars	12% de réduction des défauts

Marketing numérique et développement de plate-forme de commerce électronique

Hershey a alloué 42,6 millions de dollars en 2023 aux améliorations de la plate-forme de marketing numérique et de commerce électronique. Les ventes en ligne ont augmenté de 34,7% par rapport à l'année précédente, atteignant 276 millions de dollars de revenus numériques.

Investissement de plate-forme numérique	Budget	Croissance des ventes en ligne
Mise à niveau de la plate-forme de commerce électronique	18,3 millions de dollars	Augmentation de 27% des transactions en ligne
Technologies de marketing numérique	24,3 millions de dollars	Engagement numérique 41% plus élevé

Mise en œuvre du logiciel de gestion de la chaîne d'approvisionnement avancée

Hershey a mis en œuvre le logiciel de gestion de la chaîne d'approvisionnement SAP S / 4HANA, investissant 35,7 millions de dollars. La mise en œuvre a réduit les coûts de transport des stocks de 16% et amélioré l'efficacité logistique de 22%.

Technologie de la chaîne d'approvisionnement	Investissement	Amélioration opérationnelle
Implémentation SAP S / 4HANA	35,7 millions de dollars	16% de réduction des coûts d'inventaire
Systèmes de suivi en temps réel	12,4 millions de dollars	22% augmentation de l'efficacité logistique

Technologies d'emballage émergentes pour la préservation des produits

Hershey a investi 22,5 millions de dollars dans des technologies d'emballage innovantes en 2023, en se concentrant sur la durée de conservation et la durabilité prolongées. De nouvelles solutions d'emballage ont réduit les déchets alimentaires de 19% et diminué l'utilisation du plastique de 27%.

Technologie d'emballage	Investissement	Impact environnemental
Matériaux d'emballage biodégradables	12,6 millions de dollars	27% de réduction du plastique
Techniques de préservation avancées	9,9 millions de dollars	19% de réduction des déchets alimentaires

The Hershey Company (HSY) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations sur la sécurité alimentaire de la FDA

La société Hershey maintient Compliance à 100% avec les réglementations de sécurité alimentaire de la FDA. En 2023, la société a subi 37 inspections de la FDA dans ses installations de fabrication.

Métrique réglementaire	2023 données
Inspections de la FDA	37
Violations de la sécurité alimentaire	0
Taux de conformité	100%

Protection de la propriété intellectuelle

Hershey tient 214 brevets actifs Protéger ses conceptions de produits et ses processus de fabrication à partir de 2024.

Catégorie de protection IP	Nombre
Brevets actifs	214
Marques enregistrées	86
Demandes de brevet en instance	42

Conformité des accords du commerce international

Hershey opère dans plus de 70 pays, assurer une stricte adhésion aux accords commerciaux internationaux.

Métrique de la conformité commerciale	Statut 2024
Pays d'opération	70+
Conformité des accords de libre-échange	100%
Violations du commerce international	0

Risques potentiels en matière de litige

En 2023, Hershey a affronté 3 défis juridiques liés à l'étiquetage des produits, avec des dépenses juridiques totales de 1,2 million de dollars.

Catégorie de litige	2023 données
Des poursuites d'étiquetage des produits	3
Dépenses juridiques totales	$1,200,000
Cas résolus	2

The Hershey Company (HSY) - Analyse du pilon: facteurs environnementaux

Initiatives d'approvisionnement en cacao durables

Investissement sur la durabilité du cacao: 500 millions de dollars engagés par le cocoa pour un bon programme d'ici 2030.

Initiative	Cible	Progrès
Support de fermier de cacao	200 000 agriculteurs d'ici 2030	120 000 agriculteurs soutenus en 2023
Prévention du travail des enfants	Éliminer le travail des enfants dans la chaîne d'approvisionnement	Réduction de 75% des cas identifiés depuis 2018

Réduire l'empreinte carbone dans les processus de fabrication

Réduction des émissions de carbone: réduction de 31% des émissions de gaz à effet de serre depuis 2018.

Emplacement de fabrication	Cible de réduction du carbone	Progrès actuel
Hershey, PA Facility	50% de réduction d'ici 2025	37% de réduction réalisée
West Hershey, PA Plant	45% de réduction d'ici 2025	33% de réduction réalisée

Engagement envers les énergies renouvelables dans les installations de production

Investissement en énergie renouvelable: 40 millions de dollars alloués aux infrastructures d'énergie verte.

Source d'énergie	Pourcentage actuel	Cible 2025
Énergie solaire	22%	35%
Énergie éolienne	15%	25%

Réduction des déchets et efforts de durabilité des déchets

Objectif de durabilité de l'emballage: emballage 100% recyclable d'ici 2025.

Catégorie de réduction des déchets	Réduction du courant	Cible 2025
Emballage en plastique	Réduction de 40%	Réduction de 75%
Déchets de fabrication	35% détourné des décharges	Diversion à 90% d'ici 2025

The Hershey Company (HSY) - PESTLE Analysis: Social factors

Growing consumer demand for 'better-for-you' and low-sugar snack options.

You can't ignore the seismic shift toward healthier snacking; consumers want indulgence without the guilt, and The Hershey Company is responding by strategically expanding its better-for-you (BFY) portfolio. This isn't just a niche trend-it's a major market driver. In North America, products explicitly labeled as BFY have seen a remarkable 22.4% sales growth annually. This demand is pushing sugar-free confections to a significant market share, which has expanded from 6.1% to 11.3% over the past three years.

The company's strategy is clear: acquire and innovate. In the first quarter of 2025, Hershey's CEO cited strategic acquisitions that further expand the BFY portfolio. Their zero-sugar and BFY product lines were a key support for growth in the third quarter of 2025. The global low-calorie sweets market is projected to reach $2,332.9 million by 2025, so this focus is defintely a necessary move to capture future growth outside of traditional chocolate bars.

Increased scrutiny on child-focused marketing and advertising practices.

The scrutiny here is two-fold: direct advertising to children and the ethical sourcing of cocoa. On the marketing front, The Hershey Company has explicitly stated its intent to direct its marketing messages primarily to adults and, where appropriate, to teens, not to children under 13 on its websites. This reflects a proactive stance to mitigate regulatory risk and public backlash over promoting high-sugar products to minors.

However, the more material social risk lies in the supply chain's ethical practices, specifically child labor in West African cocoa farming. The company is tackling this through its Cocoa For Good program, which commits to a half-billion-dollar investment by 2030. Transparency is increasing, but the risk remains high. Here's the quick math on their remediation efforts:

• Child Labor Monitoring and Remediation System (CLMRS) coverage: 95% of Hershey cocoa volumes in Côte d'Ivoire and Ghana as of December 2024.
• Children covered by CLMRS in 2024: 129,111.
• Children found to no longer be doing inappropriate work or aged out: 7,428 at the most recent follow-up.

Strong seasonal and holiday spending patterns remain a key revenue driver.

Seasonal sales are the bedrock of the confectionery business, and they continue to be a massive revenue driver for Hershey. This is a core strength for the company. The US chocolate market sees a predictable surge around major holidays like Valentine's Day, Halloween, and Christmas. In the first quarter of 2025, the strength of these seasons helped drive consumption that exceeded the company's expectations in its U.S. Candy, Mint, and Gum and Salty Snacks segments.

The timing of holidays can even swing quarterly results. For instance, the North America Confectionery segment's net sales of $2,085.5 million in the second quarter of 2025 benefited from the later timing of the Easter season compared to 2024, plus the earlier shipment of some Halloween orders. Consumers are still making room in their budgets for these treats; the annual amount spent per consumer on confectionery is $276, a 4% increase from 2023.

Seasonal demand is a predictable, reliable revenue stream. It's a huge competitive advantage.

Shifting demographics drive demand for premium and dark chocolate products.

As demographics shift and consumers become more health-aware and discerning, the market is premiumizing. This means people are buying less volume of cheap candy but spending more on higher-quality, ethically-sourced, or dark chocolate options. The U.S. premium chocolate market is projected to grow at a Compound Annual Growth Rate (CAGR) of 2.9% from 2025 to 2030.

Dark chocolate is leading this charge, holding a 62.6% market share in 2025 of the premium chocolate segment. This is driven by the perception of health benefits, such as antioxidants and lower sugar content. Dark chocolate with high cocoa content (over 70%) has seen a significant 31% sales increase since 2020. This trend presents both an opportunity and a risk for Hershey, whose core portfolio is dominated by milk chocolate brands. The global premium chocolate market, a clear opportunity, was estimated at $31.87 billion in 2024 and is projected to reach $40.60 billion by 2030.

Market Segment	Key 2025/Forecast Metric	Growth Driver
U.S. Premium Chocolate Market	CAGR of 2.9% (2025-2030)	Demand for high-quality, artisanal, and gourmet products.
Premium Dark Chocolate Segment	62.6% market share (in Premium Chocolate, 2025)	Health-conscious consumers seeking antioxidant benefits and lower sugar.
Better-for-You Products (North America)	22.4% annual sales growth	Consumer desire for 'guilt-free' alternatives and alignment with health goals.
Low Calorie Sweets Market (Global)	Projected value of $2,332.9 million by 2025	Rising health awareness, prevalence of diabetes and obesity.

The Hershey Company (HSY) - PESTLE Analysis: Technological factors

Automation and robotics in manufacturing to improve defintely efficiency.

The Hershey Company is making significant capital investments to drive manufacturing efficiency and combat rising commodity costs, like the extreme cocoa price volatility seen in 2025. For the full 2025 fiscal year, the company is projecting Capital Expenditures between approximately $425 million and $450 million, with a clear focus on automation and supply chain enhancements.

This investment is directly tied to the 'Advancing Agility & Automation Initiative,' which is designed to streamline operations and increase output. The expected savings from this initiative have been raised for 2025, now projected to deliver approximately $150 million in net savings, up from the prior target of $125 million. This is a critical move to protect margins, especially when facing headwinds in the International segment, which reported a $13.6 million loss in the third quarter of 2025.

The company is implementing modular 'advanced technology lines' that use robotics to allow for smaller production runs and faster changeover times. That's a huge win for product innovation. These lines are crucial for balancing the need for high-volume, scaled production with the agility required to launch new products or trial smaller market concepts without the expense of retooling a major production line.

E-commerce and direct-to-consumer (D2C) channels require new logistics tech.

The shift to e-commerce and D2C fulfillment demands a completely different logistics technology stack than traditional retail. For a confectionary company, the biggest tech challenge is literally melting. Hershey has had to invest in specialized logistics, such as 'chilled drop shipping,' to enable 'worry-free summer shipping.' This technical solution removes a major barrier to year-round online sales growth for meltable products like chocolate.

Beyond shipping, the focus is on digital integration throughout the customer journey. The company is working to build unique e-commerce capabilities in partnership with retailers, ensuring a seamless experience whether a consumer is shopping online or offline. This involves:

• Developing impulse-buy mechanisms for online checkout lanes.
• Creating purchase histories for easy reorder reminders.
• Offering 'add-on' suggestions to help meet free shipping minimums.

The goal is to translate the physical store's impulse-buy success into the digital world. You can't just rely on a candy bar at the register anymore; you need data-driven digital prompts.

Supply chain digitization for better tracking of cocoa sourcing and sustainability.

Technology is the only way to achieve the level of supply chain transparency required by consumers and regulators today. Hershey's 'Cocoa For Good' strategy, backed by a $500 million investment by 2030, relies heavily on digitization to meet its 2025 goals.

The company is on track to achieve 100% sourcing visibility for its cocoa volume in high-risk areas of Côte d'Ivoire and Ghana by the end of 2025. This level of traceability is achieved through advanced mapping and monitoring systems. Here's the quick math on their 2025 commitment:

Technological Target (2025)	Metric/Impact	Technology Used
Cocoa Sourcing Visibility	100% of cocoa volume in Côte d'Ivoire and Ghana.	Direct Sourcing, Polygon Mapping
Child Labor Monitoring & Remediation Systems (CLMRS)	Expanded to cover 100% of high-risk sourcing.	Digital Monitoring Systems, Community Data
Farm Monitoring for Zero-Deforestation	100% Satellite Mapping of West African cocoa farms.	Satellite Monitoring Systems

This digitization is not just about compliance; it's about building a more resilient supply chain, which is critical given the current volatile cocoa market. The satellite mapping, for instance, provides real-time data to support their zero-deforestation commitment.

Use of AI for demand forecasting and personalized marketing campaigns.

Artificial Intelligence (AI) is moving beyond simple data analysis into core marketing and product innovation. Hershey is using AI to make its media spending more efficient and to drive sales in previously overlooked markets.

For high-stakes seasons like Halloween, the company deployed a custom algorithm that ingested sales data broken down by zip code to auto-optimize media bidding. This AI-driven approach allowed them to focus ad spending where it mattered most, successfully driving sell-through to 90% in underperforming markets, up from under the national sell-through average of 85%. That's a direct, measurable return on AI investment.

Plus, AI is now a central part of their product pipeline. They are using an AI-driven innovation tool called Atlas to accelerate product development.

• Rapid Brand Creation: Generates logos, mood boards, and packaging concepts quickly.
• Personalized Marketing at Scale: AI is used for zip-code level targeting and scaling content creation across an estimated 19,000 digital shelf assets.
• Strategic Insight: Provides data-backed recommendations for licensing and M&A due diligence.

The technology is allowing them to move from broad, national campaigns to highly localized, personalized outreach, effectively speaking to consumers in places like Topeka, Kansas, who were previously missed by media strategies focused only on the largest five U.S. cities.

The Hershey Company (HSY) - PESTLE Analysis: Legal factors

Class-action lawsuits regarding heavy metals (cadmium, lead) in chocolate products.

The most pressing legal factor for The Hershey Company in 2025 remains the ongoing class-action litigation concerning heavy metals-specifically lead and cadmium-found in some of its dark chocolate products. This issue stems from a December 2022 Consumer Reports finding, which alleged that 23 of 28 dark chocolate bars tested contained potentially harmful levels of heavy metals for an adult consuming one ounce per day.

The core legal exposure is based on claims of deceptive marketing and failure to disclose health risks, particularly under California's Proposition 65 (Prop 65) standards, which set a Maximum Allowable Dose Level (MADL) for these chemicals. For example, one test found that a one-ounce serving of Hershey's Special Dark Mildly Sweet Chocolate exceeded the allowable lead limits by 265%. Another product, Lily's Extremely Dark Chocolate 85% Cocoa, was found to be 143% above the lead MADL and 101% above the cadmium MADL. This is a serious legal and reputation risk.

While one plaintiff in the Southern District of California agreed to end her suit with prejudice in March 2025, the dismissal was without prejudice for absent proposed class members, meaning the broader class-action risk persists. Another nationwide class action remains pending certification in the U.S. District Court for the Eastern District of New York.

Here's the quick math on the compliance challenge based on the Consumer Reports findings:

Product	Heavy Metal of Concern	Exceedance of CA MADL (Approx.)
Hershey's Special Dark Mildly Sweet Chocolate	Lead	265%
Lily's Extremely Dark Chocolate 85% Cocoa	Lead	143%
Lily's Extremely Dark Chocolate 85% Cocoa	Cadmium	101%

Compliance with evolving FDA food safety and nutritional labeling standards.

The regulatory landscape is shifting quickly, demanding continuous compliance updates. In June 2025, the FDA announced a major update to its General Food Labeling Requirements Compliance Program, which will guide inspectors and tighten enforcement.

The key focus areas for The Hershey Company's legal and regulatory teams in the 2025 fiscal year include:

• Sesame Allergen Labeling: Compliance with the FASTER Act, which mandates clear declaration of sesame as the ninth major allergen.
• Updated Nutrition Facts Panel: Ensuring all labels reflect the 2016 revisions, including the mandatory declaration of Added Sugars.
• Front-of-Package (FOP) Labeling: Preparing for a proposed rule, announced in January 2025, that would require a prominent 'Nutrition Info box' on the front of packaged foods. This box would display the percentage of daily value for saturated fat, sodium, and added sugars, and is a significant change.

Honestly, the FDA's intensified scrutiny on nutrition transparency, especially around added sugars and serving size accuracy, means the legal risk of a label violation leading to fines or recalls is higher than in previous years.

International intellectual property protection for core brand names and recipes.

Protecting iconic brands like Reese's, Kit Kat, and Hershey's Kisses globally is a constant legal battle. The company's international intellectual property (IP) strategy focuses heavily on trademark enforcement to combat counterfeiting and passing off.

A concrete example of this active enforcement came in May 2025 when the Delhi High Court in India granted The Hershey Company a permanent injunction. The injunction restrained the defendants from infringing upon the company's trademark and from misrepresenting their association, which is a clear win for protecting brand equity in a high-growth international market. This kind of active litigation is defintely necessary to protect the more than 80 brand names the company markets and sells in approximately 90 countries worldwide.

Labor laws and union negotiations, especially in US manufacturing facilities.

Labor relations and compliance with the National Labor Relations Board (NLRB) continue to be a significant legal risk for US manufacturing operations. The company has a history of major labor negotiations, such as the 2010 deal in Hershey, Pennsylvania, which involved a $200 million investment in the West Hershey plant but also the planned elimination of 500 to 600 jobs at the older facility.

More recently, the Stuarts Draft, Virginia plant has been a focal point for unionization efforts by the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union. In late 2023, the NLRB threw out the results of a previous election due to allegations of illegal union-busting by the company. The resulting settlement included a $200,000 payment to a union sympathizer who was allegedly fired in retaliation, plus an order for a new union election. This situation creates legal exposure for unfair labor practice charges and potential back pay liabilities. Also, the political environment in 2025 suggests a potential shift in NLRB priorities, which could either simplify or complicate labor negotiations, depending on the administration's stance on pro-labor policies.

Finance: draft a contingency plan for a 5% wage increase across all US manufacturing facilities by the end of Q1 2026 to mitigate unionization risk.

The Hershey Company (HSY) - PESTLE Analysis: Environmental factors

Climate change impacts cocoa crop yields in West African sourcing regions

You need to understand that climate change is not a theoretical long-term risk for Hershey Company; it is a 2025 cost-of-goods reality. The core of the issue is that West African cocoa production, which supplies nearly 70% of the world's cocoa, is shrinking for the fourth consecutive year. This is a direct result of erratic weather, including drought and excessive heat. For example, in 2024 alone, human-caused climate change added approximately six weeks of days above 32°C (89.6°F)-temperatures too hot for cacao-in 71% of the primary cocoa-producing areas of Côte d'Ivoire and Ghana.

This climate-driven supply shock has sent prices soaring. Cocoa prices have doubled since the start of 2024 and are projected to remain high through at least September 2025, which directly impacts Hershey's input costs. Honestly, this is why Hershey lowered its 2025 profit outlook; higher production costs due to climate-related supply chain challenges were a culprit. The company is responding by investing in 'Climate-Smart Cocoa Practices' and agroforestry programs to help farmers adapt and restore a stable cocoa supply.

Pressure to reduce packaging waste and transition to 100% sustainable materials

The regulatory and consumer pressure to manage packaging waste is intense, especially for a high-volume snack company. Hershey has actually done well on its initial goals, having met its 2015 commitment to reduce packaging weight by 25 million pounds by 2025 five years early. That's a good start.

However, the focus has shifted to material circularity. The company has a new target to eliminate an additional 25 million pounds of packaging materials by 2030. Progress toward this new goal is measurable: cumulative packaging waste eliminated between 2021 and 2024 reached 17.8 million pounds. The biggest challenge remains flexible plastics, where limited recycling infrastructure makes the 2030 goal of having 100% of plastic packaging recyclable, reusable, or compostable a major capital and R&D hurdle.

Here's a quick look at their packaging reduction progress:

• 2015 Goal: Reduce packaging weight by 25 million pounds by 2025. (Achieved early)
• New Goal: Eliminate an additional 25 million pounds of packaging by 2030.
• Progress (2021-2024): 17.8 million pounds of packaging waste eliminated.
• 2024 Elimination: Two million pounds of packaging eliminated in 2024.

Water usage and scarcity risk in manufacturing and agricultural supply chains

Water is a critical, yet often overlooked, risk in the supply chain. Hershey's operations face scarcity risks, especially in regions with high water stress. The good news is the company exceeded its internal conservation goal in its most vulnerable facilities. They aimed for a 20% reduction in absolute water consumption against a 2018 baseline in priority facilities where water is most scarce, and they achieved a 31% absolute water reduction in 2024.

But, what this estimate hides is the challenge of overall business growth. Despite the efficiency gains at priority sites, the company's 2024 Responsible Business Report noted a slight increase in both overall water usage and intensity across the entire network. So, while the high-risk sites are better off, the overall water footprint is still a moving target that requires continuous investment in process improvements.

Corporate commitment to deforestation-free cocoa sourcing standards

Hershey has a clear, near-term target to eliminate commodity-driven deforestation. The company is committed to achieving a deforestation and conversion-free supply chain for key commodities, including cocoa, palm oil, pulp & paper (packaging), and direct soy, by December 31, 2025. This is a firm deadline.

To meet this, they are focused on traceability in their West African supply chain. The goal is 100% sourcing visibility of their cocoa volume in Côte d'Ivoire and Ghana by the end of 2025. As of their 2024 reporting, they were on track, with 88% sourcing visibility achieved. Plus, 98% of the farmers producing their cocoa volume in these countries are polygon mapped by suppliers, which is a crucial step for using satellite monitoring (like the Starling solution) to enforce the no-deforestation policy. Still, a November 2025 report from the NGO Global Witness suggested that untraceable bulk cocoa, which is mixed with certified cocoa, continues to link major brands to deforestation in regions like Liberia, indicating that the industry-wide challenge of full supply chain segregation is defintely still a risk.

Environmental Metric (2025 Focus)	Target Year	2024 Progress/Status	Impact on HSY Business
Cocoa Sourcing Visibility (Côte d'Ivoire & Ghana)	2025	88% achieved (on track for 100%)	Enables real-time deforestation monitoring; mitigates EU regulatory risk.
Deforestation-Free Supply Chain (Cocoa, Palm Oil, etc.)	December 31, 2025	Polygon mapping reached 98% of farmers in key regions.	Secures long-term ingredient supply; protects brand reputation.
Water Consumption Reduction (Priority Sites)	2018 Baseline	31% absolute reduction achieved in 2024 (Exceeded 20% goal).	Improves operational efficiency; reduces exposure to local water scarcity.
Packaging Waste Elimination (Cumulative)	2030	17.8 million pounds eliminated (2021-2024).	Reduces material costs; addresses consumer demand for less waste.
Climate Change Impact on Cocoa	Ongoing (2025 Reality)	Cocoa prices high through Sept 2025; West Africa crop shrinking 4th year.	Directly increases Cost of Goods Sold; lowered 2025 profit outlook.