Quiz on the BC: Hershey

Where does most of Hershey's cocoa come from?

• Asia

• South America

• West Africa

• Europe

Answer explanation

Western African countries,such as Ghana and Cote d’Ivoire, have supplied about 70% of the world's cocoa to the chocolate industry.

What issue is Hershey facing with its cocoa supply chain?

• Overproduction

• Child labor

• Low demand

• High cost of cocoa

Answer explanation

Hershey is challenged by the presence of child labor in its cocoa supply chain, which conflicts with its commitments to ethical sourcing and ESG principles.

What value does Hershey promote that contrasts with its supply chain issues?

• DEI and ESG

• Low prices

• Fast shipping

• High-quality packaging

Answer explanation

Hershey promotes values of Diversity, Equity, and Inclusion (DEI) and Environmental, Social, and Governance (ESG) principles, which contrast with the ethical concerns raised by child labor in its cocoa supply chain.

Hershey's founder, Milton Hershey, is associated with what value?

• Responsible citizenship

• Profit only

• Short-term growth

• Low-cost labor

Answer explanation

Milton Hershey is known for his commitment to social responsibility, shown by founding a school for disadvantaged children, which contrasts with the child labor issues in the company's cocoa supply chain.

What is the main contradiction in the Hershey paradox?

• Hershey’s support for ethical values versus issues with child labor

• Hershey’s high prices versus low demand

• Hershey’s focus on innovation versus traditional products

• Hershey’s expansion versus environmental goals

Answer explanation

The Hershey paradox lies in the company’s public commitment to ethical values, such as child welfare and sustainable practices, while still relying on a cocoa supply chain linked to child labor.

How does Hershey's association with child labor affect its image?

• It boosts sales

• It harms its reputation

• It has no impact

• It attracts more investors

Answer explanation

The association with child labor damages Hershey’s reputation as a socially responsible company. It risks consumer trust and conflicts with its brand image of happiness, care, and ethical business practices.

Why is child labor a risk for Hershey’s business reputation and operations?

• It increases costs and operational complexity

• It leads to reduced efficiency in cocoa production processes

• It limits the company’s ability to expand into new market

• It risks consumer boycotts and loss of key retailer partnerships

Answer explanation

Child labor poses a serious risk as it could lead to consumer boycotts and the loss of partnerships with major retailers like Walmart, which could significantly impact Hershey’s revenue and market position.

What is a primary issue Côte d'Ivoire’s Coffee and Cocoa Council (CCC) and Ghana’s Cocoa Board have with Hershey regarding its cocoa sourcing practices?

• Hershey's reluctance to increase the price of chocolate bars in the U.S. market

• Hershey's alleged attempt to avoid paying the Living Income Differential (LID)

• Hershey’s use of synthetic cocoa, which undermines natural cocoa production in Côte d'Ivoire and Ghana

• Hershey's request for an exclusive agreement with Côte d'Ivoire to limit cocoa exports to other companies

Answer explanation

The CCC and Ghana’s Cocoa Board accused Hershey of trying to avoid paying the LID, a premium intended to improve farmers’ incomes. This allegation raises questions about Hershey’s commitment to sustainable and fair sourcing.

What do customers expect from companies like Hershey?

• Profits above all

• High-quality ads

• Ethical business practices

• Low prices only

Answer explanation

Consumers increasingly expect companies to uphold ethical standards, including sustainable sourcing and the elimination of child labor. Failing to meet these expectations can lead to reputational damage and loss of consumer trust.

What has Hershey promised to improve in its cocoa supply chain?

• Quality control

• Cost reduction

• Child labor monitoring

• Faster shipping

Answer explanation

Hershey has committed to expanding its Child Labor Monitoring and Remediation System (CLMRS) to track and address child labor cases in its cocoa supply chain, aiming for 100% coverage by 2025.