1 District 6 April 16, 2009 By: Melissa VanderMel (Customer Sales Executive) Meghan Krivoshein...

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District 6

April 16, 2009By:

Melissa VanderMel (Customer Sales Executive)

Meghan Krivoshein(District Manager)

Jim Morrison(Retail Sales Representative)

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Agenda

Why Confection?

Business Review

Grow profit and sales with Hershey’s exciting Q2 promotions

Fun contest with prizes

Questions

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Why Confection?

4

Confection is a large Category at Hannaford Ranking in the top 20

DSS: YTD 11-12-2008

5

Confection consistently outperforms top edible categories in recession years

-4

-2

0

2

4%

Win

e

Con

fect

ion

Cookie

s

Cra

ckers

Salt

yS

nack

s

Beer

Soup

Bott

led

Juic

e

Cold

Cere

al

Carb

Bev -2

-1

0

1

2%

Con

fect

ion

Cra

ckers

Beer

Salt

yS

nack

s

Bott

led

Juic

e

Soup

Win

e

Carb

Bev

Cookie

s

Cold

Cere

al

Source: IRI FDMx 52 weeks ending 12/2000 and 12/2003

Dollar Percent ChangeTop 10 Edible Foods in 2000

Dollar Percent ChangeTop 10 Edible Foods in 2003

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Confectionery Delivers High Profitability Driven By High Gross Margin

Confectionery margins are 3-5% points higher

Source: DHC Analysis of Retailer Data

% Gross Margin

27%30%

Confectionery Grocery Average

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Confectionery Is Among Most Frequently Purchased Categories In Stores

Source: ACNielsen HomeScan

Frequent purchases make it key to retailers

Annual Purchases

15

12

11

7

31

30

22

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Coffee

Soup

Cookies

Bottled Juice

Cereal

Confectionery

Milk

Carb. Bev.

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Candy Is The Most Responsive Category For Display Treatment

Source: IRI, Food, 2005

% Increase On Display Only

88%

68%

61%

49%

169%

105%

95%

95%

Beer

Spices/Seasoning

Wine

Salty Snacks

Bottled Water

Carb. Beverages

Cookies

Candy

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Confectionery is Expandable – Not a Zero Sum Game

Source: Dechert-Hampe & Co.

Fixed Consumption Expandable Consumption

Consumption

weeks

PurchasingConsumption

weeks

Purchasing

Consumption at fixed rate

Soap, Detergent, Toilet Paper

Promotion Loads Pantry

Consumption Driven by Purchase

Candy, Snacks, Beverages

Promotion Builds Consumption

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See Candy, Buy Candy, Eat Candy…buy more candy

See Candy

Buy Candy

Eat Candy

Buy Candy

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Consumers Often Have A Special Relationship With Confectionery

Source: Dechert-Hampe & Co.

“It makes me happy, when I’m feeling blue”

“It’s a little pick-me-up when I need some energy”

“I feel I’m a better person when I have my candy”

“I hide candy. I keep my own stash – the good stuff”

“The holidays wouldn’t be the same without the candy”

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Business Review

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Hershey is larger than the next three manufactures at Hannaford

Source: IRI 52 Week Ending 12-28-2008

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Top 4 Packtypes represent 62% of Hannaford’s C.G.M. Business with Hershey being share leader in all 4.

IRI Hannaford RMA 52 wks ending 12/28/08

Hsy share 42%

Hsy share 17%

Hsy share 44%Hsy share 57%

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YTD March 22, Easter timing is driving total dollars down. However, Hannaford declines are greater than market.

Dollar % Chg vs. LY

IRI, YTD 3-22-2009

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Easter is driving YTD dollars down due to the timing of Easter falling on March 23rd LY

Other 1.7%

0

20

40

60

80

100%

Dollars

Easter 8.6%

Valentines 13.6%

Non-Seasonal 76.1%

$11,308,800

$228,424

-$185,794

-$1,541,978

Dollar Chg

IRI, YTD 3-22-2009

Hannaford Total CMG Dol Share & Dol ChgHannaford RMA; YTD we 3/22/09

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There’s an opportunity to increase Candy, Gum and Mint sales with Hershey’s in District 6

DSS Hannaford YTD w/e 3/28/09 Hershey

Last 52 LY Last 52 TY % +/ -

Overall Result $ 17,685,493 $ 17,235,435 -2.5

DISTRICT 3 $ 1,484,952 $ 1,418,646 -4.5

DISTRICT 8 $ 1,459,178 $ 1,409,544 -3.4

DISTRICT 10 $ 1,439,888 $ 1,376,417 -4.4

DISTRICT 4 $ 1,379,031 $ 1,354,217 -1.8

DISTRICT 2 $ 1,344,734 $ 1,328,476 -1.2

DISTRICT 1 $ 1,302,958 $ 1,274,354 -2.2

DISTRICT 9 $ 1,264,598 $ 1,265,334 0.1

DISTRICT 6 $ 1,259,451 $ 1,186,960 -5.8

DISTRICT 7 $ 1,239,906 $ 1,182,238 -4.7

DISTRICT 19 $ 1,194,318 $ 1,132,710 -5.2

DISTRICT 18 $ 1,031,395 $ 1,123,642 8.9

DISTRICT 13 (Independents) $ 815,317 $ 865,297 6.1

DISTRICT 21 $ 790,207 $ 766,547 -3.0

DISTRICT 22 $ 825,108 $ 761,254 -7.7

DISTRICT 20 $ 778,481 $ 742,121 -4.7

DISTRICT 23 (Dover #242) $ 17,900 $ 47,678 166.4

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District 6 Hershey’s sales by store

DSS Hannaford YTD w/e 3/28/09 Hershey

Store # Last 52 LY Last 52 TY % +/ - Hershey Rep DistrictTotal $ 17,685,493 $ 17,235,435 -2.500149 $ 62,253 $ 53,778 -13.6 KRISTINA GOUGOUSHEVA DISTRICT 6

00159 $ 91,573 $ 91,176 -0.4 BETHANY KUCHARIK DISTRICT 6

00160 $ 76,432 $ 76,281 -0.2 JAMES MORRISON DISTRICT 6

00247 $ 76,320 $ 87,743 15.0 TIMOTHY KEEFE DISTRICT 6

00248 $ 130,355 $ 117,961 -9.5 TIMOTHY KEEFE DISTRICT 6

00253 $ 0 $ 17,672 0.0 TIMOTHY KEEFE DISTRICT 6

00314 $ 109,362 $ 109,518 0.1 TIMOTHY KEEFE DISTRICT 6

00315 $ 107,309 $ 96,593 -10.0 JAMES MORRISON DISTRICT 6

00317 $ 137,434 $ 116,213 -15.4 JAMES MORRISON DISTRICT 6

00318 $ 87,325 $ 82,482 -5.5 TIMOTHY KEEFE DISTRICT 6

00319 $ 90,308 $ 91,399 1.2 JAMES MORRISON DISTRICT 6

00352 $ 135,418 $ 123,177 -9.0 BETHANY KUCHARIK DISTRICT 6

00373 $ 155,361 $ 122,967 -20.9 KRISTINA GOUGOUSHEVA DISTRICT 6

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Encourage ‘one more sale in the basket’ with secondary displays of these top selling Hershey items

Source: Hannaford DSS 1/5-11/15/08 item rank $ sales TOTAL CATEGORY everyday and seasonal combined

Rank in the

Top 10

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Hershey’s Chocolate Syrup 24oz ranks #1 in dollar sales at Hannaford

Hrd DSS 1-5-2008 thru 11-15-2008 ice tea, cocoa and syrup

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Grow profit and sales with Hershey’s

exciting

Q2 promotions

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Increase sales of top selling Hershey’s Syrup 24oz with continued support of rack displayed near milk case

Hannaford Factory Sales YTD to April, 2007 – Sam (+18%)

+18%

Source: Hrd DSS 1-5-2008 thru 11-15-2008 ice tea, cocoa and syrup (#1)

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Items on the Hershey’s Low Profile rack, at Hannaford, return between 36% to 44% profit margin

Ice Breakers Mints 41%

Ice Breakers Bottle Packs 36%Ice Breakers Gum Packs 44%

Standard Bars 38%

Benefits:•Highly profitable•Confection is highly impulsive with 42% unplanned•Allows for first to street with new items (e.g. IB Bottle Pks)

April 2, 2009

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4 sided rack April – June Planogram displays high profit, top selling candy items

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April 2009 promotional display plan

Packaged 12oz

Largest Packtype

Night at the Museum Battle of the Smithsonian

5/22

Summer

Profitable, Top Selling Items

Milk 6pks (S’Mores): ranks 1, $ sales

Reese’s & Kit Kat Snack: ranks 2 & 6, $ sales

Bonus Twizzlers: ranks 9th, $ sales

Bonus Standard Bars: 38% profit margin

King Size Shipper: 38% profit margin

Mother’s Day Pot of Gold Demo (4/25)

Theater Boxes

Profitable, Value Offering

at 5/$5

Source: ranking; Hannaford DSS 1/5-11/15/08 item rank $ sales TOTAL CATEGORY CGM everyday and seasonal combinedProfit margin: std bars based off .79 SRP and King based off $1.39 SRP

32% profit margin

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May 2009 promotional display plan

Packaged 12oz

Largest Packtype/Value

Offering with Bonus

Bonus Packaged Module, 150ct

Summer

Profitable, Top Selling Items

Milk 6pks (S’Mores): ranks 1, $ sales

Reese’s & Kit Kat Snack: ranks 2 & 6, $ sales

Bonus Twizzlers: ranks 9th, $ sales

Bonus Standard Bars: 38% profit margin

King Size Shipper: 38% profit margin

Fresh Magazine

Profit

Starbucks featured in May – June issue

Source: ranking; Hannaford DSS 1/5-11/15/08 item rank $ sales TOTAL CATEGORY CGM everyday and seasonal combinedProfit margin: std bars based off .79 SRP and King based off $1.39 SRP

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June 2009 promotional display plan

Packaged 12oz

Largest Packtype/Value Offering with

Bonus

Bonus Packaged Module, 150ct

Summer

Profitable, Top Selling Items

Milk 6pks (S’Mores): ranks 1, $ sales

Reese’s & Kit Kat Snack: ranks 2 & 6, $ sales

Bonus Twizzlers: ranks 9th, $ sales

Summer Co-Marketing June 7-July 11:

–Asst module (cartons/Twizzlers) & Syrup module

Hannaford & Hershey Help Fight Hunger

Hershey’s donates $20K

Reese’s Loves You Back Standard Bar shipper

New Item

Demos

Reese’s Dark Pkg DRC co-op with water (end of June)

Reese’s Cremes DRC and Trial Size (end of June)

Source: ranking; Hannaford DSS 1/5-11/15/08 item rank $ sales TOTAL CATEGORY CGM everyday and seasonal combinedProfit margin: std bars based off .79 SRP and King based off $1.39 SRP

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May 3rd

$1 off Bliss or Reese’s Clusters

May 17th

$1 off Honey Maid Grahams when you buy 1 Jet Puffed Marshmallow and 1 Hsy Milk 6pk

May 17th

$1 off two Syrup/Toppings

June 28th

$1 off two 6 packs (graphics pending) &

$1 off 3 Twizzler bags

Hershey’s National FSI’s April – June 2009

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S’Mores Rocks Your Block …

Smores_Rocks_Your_Block.mpg (4...

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Corrugated S’Mores Display

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Confectionery has the dimensions to increase consumption, sales and profits

– Huge category One of the largest

– Profitable Strong margins

– Frequently purchased Key to shopping trips

– Incremental Builds the shopping basket

– Promotable Responds to activity

– Expandable Consumption leads to growth

Source: Dechert-Hampe & Co.

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Hershey’s fun facts………..

•When did Hershey began making Kisses?

•Finish this - SEE CANDY, …

•Who has the largest share of C.G.M business at Hannaford?

•What’s Hannaford’s #1 Confection item, $ sales

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Thank you!

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See Candy, Buy Candy, Eat Candy…buy more candy

See Candy

Buy Candy

Eat Candy

Buy Candy