Dear Fellow Stockholder:
It is my pleasure to invite you to attend The Hershey Company’s 2023 Annual Meeting of Stockholders, which will be held virtually at 10:00 a.m. Eastern Daylight Time on Tuesday, May 16, 2023. Your vote is extremely important, so I encourage you to review the materials and submit your vote as soon as possible.
In 2022, we delivered one of our strongest years in history despite record inflation, continued supply chain disruptions and macroeconomic uncertainty for many consumers. We achieved a milestone, exceeding $10 billion in net sales. It took tremendous hard work, perseverance and agility from every one of our employees and partners, and I couldn’t be prouder of what they’ve accomplished or more excited for what lies ahead.
We expect to deliver another year of strong sales and earnings growth in 2023 as we invest in our amazing portfolio of brands, additional production capacity and capabilities, and our people.
While capacity limitations impacted our ability to fully capture consumer demand, we were able to maintain our share lead in the confectionery category. Despite supply chain obstacles during the year, the team delivered a record year of production and significantly improved output and inventory levels.
With the addition of Dot’s Pretzels, LLC and Pretzels, Inc. to the portfolio, our Salty Snacks business now represents 10% of company net sales. Our newest power brands, SkinnyPop, Pirate’s Booty and Dot’s Homestyle Pretzels are reaching more consumers in more occasions that are highly incremental to our beloved confection brands.
Our international markets generated net sales growth of more than 16% in 2022. The team continues to make big strides in optimizing the portfolio mix and cost structure to deliver sustainable and profitable growth.
While we spent time focused on execution, we also continued to advance work on key capabilities critical to our growth ambitions and will continue to do so in 2023. Priorities in 2023 include increasing advertising on key confection and Salty Snacks brands, adding capacity to our fastest growing brands including Reese’s and SkinnyPop, transitioning our Salty Snacks business onto our new Enterprise Resource Planning (ERP) platform and adding talent within our Salty Snacks team to scale up capabilities to support the business’ robust growth.
While more than half of U.S. consumers indicate inflation is having an impact on their food purchases, our categories remain resilient. According to our consumer insights, chocolate and salty snacks rank as two of the top three treats that consumers are not willing to forgo. We believe snacks and confection trends will continue to pace ahead of other food categories, and we are confident in our strategies to drive future growth.
We are working toward several ambitious goals designed to help ensure long-term business resilience and positive change across global environmental and social areas, supported by robust governance. Our primary focus remains on cocoa with progress on increasing sourcing visibility, expanding child labor prevention, monitoring and remediation programs and forest protection, as well as planned investment in an innovative program to improve farmer incomes and strengthen economic resilience. We have continued to advance our diversity, equity and inclusion efforts over the past several years. Diversity is a source of employee engagement and business innovation. We have made great progress in bringing together a wider range of talent and perspectives and have strengthened our talent development programs.
I want to close with appreciation for my colleagues across the company who share a deep purpose to make more moments of goodness for our consumers, unparalleled pride in making and selling our beloved brands and an enduring value of togetherness.
Thank you for your continued trust in The Hershey Company. We look forward to sharing more details during the Annual Meeting about the past year and our vision to become a Leading Snacking Powerhouse.
Lead Today, Create Tomorrow-
Michele Buck
Please note that the above content is a direct extraction from the provided shareholder letter, with the exclusion of any paragraphs mentioning "annual report" as per the instructions. The letter is concluded with the signature of Michele Buck, Chairman, President and CEO of The Hershey Company.Read the original letter here.
