Well, the subject pretty much says it all. Not only did Hershey’s purchase Scharffen Berger, and Joseph Schmidt, but Dagoba is now on their list of recent acquisitions.

Here is the press release :

http://www.thehersheycompany.com/news/release.asp?releaseID=918471

I am curious as to what the other forum members think of this latest purchase.

-Art
[url="http://www.amanochocolate.com/"]Amano Artisan Chocolate[/url] — Fine Chocolate Straight from the Bean

Will be interesting to see what they do with it. I’d known about it ahead of time. Not much has changed with SB and JS thus far (other than expanded distribution and promotion, but i see that as a good thing). Would anticipate (at least in the interim) that this would be treated similiarly…

A shame, really. But Hershey’s little experiment will fail. That company has never been dedicated to making any ‘fine’ chocolate and never will be. I hope Hershey’s loses a lot of money in this venture.

It seems like many American companies are predisposed to trading in their passions for wads of cash.

Shame on you Frederick Schilling. You are truly a sell-out without integrity in the end. Good riddance.

Remember too that Hershey’s may have made a “plata-o-plomo” deal, that is, either you sell or we crush you.
There are many ways a big company can squash a small rival including mass-marketing a competing product,
legal action, helping their competitors etc. etc.

Meanwhile, as to Scharffen Berger or any other company now under the Hershey’s umbrella, if it follows the
typical pattern of a big company buyout, at first you won’t notice anything. Then subtle changes will appear.
I’ll bet one of the first changes they make is to repackage everything in that excreble plastic. Then they
may try to incoporate the Hershey’s logo on the package. Eventually the old company’s logo becomes smaller
and might disappear.

On the quality front nothing changes initially. Then after a few years quality might start to decline.
It could be, for example that Hershey’s seeks to increase production and distribution. This necessitates buying
from larger sources of cocoa supply. The bigger the volume, the less tight the quality controls can be because,
inevitably, there is a limited amount of top-grade beans. Later they might try to streamline production through
processes that are either more automated or cheaper. These processes tend to lead to products that are almost,
but not quite as good as the originals. Now begins a deadly downward spiral of process revision, each step being
that imperceptible notch lower in quality. After a few such cycles, the product is much worse than it used to
be, but it’s done so gradually that nobody notices.

It’s not a given, though, that all big-company buyouts will work like that. It depends on the vision of the senior
management – how committed are they to understanding that a premium product represents a different market niche for
which different rules apply? If they get that, then perhaps nothing changes and everybody wins. If not, problems
ensue. The classic example of a company that gets positioning is Guittard. They are a very large producer (no
buyout worries here!) and yet in their high-end range produce great chocolate. But wisely they keep a separate
packaging and production for it, at a lower level than their bulk chocolate products. They succeed in covering
a wide market spectrum effectively. The most difficult temptation for most big companies to resist is the
expansion of production and distribution, but this is essentially the death knell for any high-end product.

Notwithstanding, though, S-B and Dagoba are sort of marginal in the quality chocolate field – at the low end of the
premium scale. Many chocolatiers are much better than that. I don’t think of it as a tragic loss.

Alex Rast
Alex_Rast_Alternate@hushmail.com