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Retail Execution Meeting

January 20, 2009Danvers, MA

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Agenda

How did we perform against our 2008 objectives?

Business Review

What does success look like in 2009?

– Meet with District Managers and Retail Merchandisers once a quarter

– Distribution

– Secondary displays in prime real estate

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How did we perform against our 2008 Objectives?

Objectives Increase factory sales by 6% or $15.9M

Factory sales were up 111.2% or $1.6M vs. prior year Up 109.2% or $1.3M vs. plan

Grow share by 2 points to 34% Share was up .06% at 32.6%

Reduce reclaim from 4% to 2.5% of gross sales Reclaim was reduced by 1.8% to 2.7%

Back to the Basics Distribution: Tag and in stock as per planogram(s) Develop relationship with Hannaford Operations Ensure all displays are out of the backroom Secondary displays of seasonal chocolate packaged candy

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Factory sales were up $1.6M mostly due to Packaged Chocolate 2/$6 supported with module displays

Source: HRD Factory Sales 2008 - Sam

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Hannaford’s Candy, Gum, Mint (CMG) business is growing. Hershey is driving growth at Hannaford and in market.

Source: IRI 52 Week Ending 12-28-2008

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The 3 largest packtypes drove Hershey’s Growth at Hannaford in 2008.

Other 11.1%

King Size 3.4%

Lg/Xl/Gt/Prem 6.1%

Snk Size 7.6%

Nonchoc Pkg 8.7%

Std Loose 10.4%Multipack 14.6%

Choc Pkg 38.1%

-200,000 -100,000 0 100,000 200,000 300,000

Lg/Xl/Gt/Prem -$107,732

Snk Size -$95,419

King Size $35,856

Nonchoc Pkg $92,523

Std Loose $103,951

Choc Pkg $188,348

Multipack $240,392

Other $281,878

Source: IRI Hershey 52 Week Ending 12-28-2008

Hershey Dollar Share by Packtype Hershey Dollar Change by Packtype

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These 25 stores do 30% of Hershey sales at Hannaford totaling $3.8M.

Source: Hannaford DSS YTD 12/28/08

Store #

Hannaford Location Hershey Dollars TY

Hershey Dollars

LY

% Chg $ Chg Rank RSR

355 St Albans Vt Hrd $202,758 $192,386 5.4% 10,373 1 Ron Gagnon186 Nashua Nh Hrd $185,261 $169,811 9.1% 15,450 2 Jason Roberts163 Keene Nh Hrd $182,350 $181,739 0.3% 611 3 Jason Roberts351 Forest Ave Me Hrd $168,826 $165,752 1.9% 3,075 4 Phil Hannan353 Essex Vt Hrd $165,413 $154,663 7.0% 10,750 5 Ron Gagnon241 Belfast Me Hrd $165,249 $149,831 10.3% 15,418 6 Tim Rodrique230 Rockland Me Hrd $159,199 $158,138 0.7% 1,061 7 Tim Rodrique239 Augusta Turnpike Me Hrd $158,978 $159,405 -0.3% (427) 8 Tim Rodrique362 Colonie Ny Hrd $152,921 $147,760 3.5% 5,161 9 Glenn Hayner120 Raymond Nh Hrd $151,184 $143,179 5.6% 8,005 10 J im Morrison329 Concord Nh Hrd $149,751 $155,485 -3.7% (5,734) 11 Tim Keefe231 Brunswick Me Hrd $148,891 $132,131 12.7% 16,759 12 Phil Hannan342 Scarborough Me Hrd $148,614 $140,178 6.0% 8,436 13 Bethany Kucharik190 Hampstead Nh Hrd $147,352 $150,964 -2.4% (3,612) 14 Kimberly Lekarcyk365 Clifton Park Ny Hrd $146,613 $146,116 0.3% 497 15 Glenn Hayner138 Saco Me Hrd $145,507 $145,492 0.0% 15 16 Bethany Kucharik374 Broad St Ny Hrd $144,446 $147,401 -2.0% (2,955) 17 Glenn Hayner188 Yarmouth Me Hrd $143,720 $144,197 -0.3% (477) 18 Phil Hannan173 Brewer Me Hrd $143,511 $132,155 8.6% 11,356 19 Joanne Cain133 Old Town Me Hrd $143,377 $141,735 1.2% 1,642 20 Joanne Cain123 Ellsworth Me Hrd $142,974 $148,639 -3.8% (5,664) 21 Joanne Cain178 Hanover St Nh Hrd $142,651 $126,635 12.6% 16,016 22 Tim Keefe109 Airport Mall Me Hrd $140,726 $148,017 -4.9% (7,291) 23 Joanne Cain386 Colonie Latham Ny Hrd $140,478 $146,541 -4.1% (6,062) 24 Glenn Hayner166 Plattsburgh Ny Hrd $138,933 $139,213 -0.2% (280) 25 Ron Gagnon

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What Does Success Look Like in 2009?

Objective

Increase factory sales by 3% to $17.2M

Grow share 1 point to 33.2%

Continue to manage reclaim (first to street with displays)

How

Develop Hannaford Operations

Distribution: Tag and in stock as per planogram(s)

Secondary displays during key promotional events

AND a lot of caffeine!

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Why is developing Operations important?

Meeting with Hannaford Operations (e.g. District Managers & Division Merchandisers) will help to bridge the gap of communication between Corporate office and store personnel

Educate on the importance of the Confection Category to their overall store sales

Discuss expectations

Saves time: sell in programs and racks to an entire district vs. store by store

Discuss opportunities

Develop a healthy competition between districts leveraging internal data

Gives Hershey edge over the competition

Leverage your expertise – share how time you spend in their stores

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Use this slide with Hannaford Operations to show how their district(s) are performing against total sales and vs. other districts. Celebrate successes and discuss opportunities.

Source: Hannaford DSS YTD 12/28/08

Use in your Hannaford Operation appointments…

District Category Dollars TY

Category Dollars LY

% Chg $ Chg Hershey Dollars TY

Hershey Dollars LY

% Chg $ Chg

1 Total $3,793,156 $3,797,537 -0.1% -$4,382 $1,303,523 $1,263,028 3.2% $40,4942 Total $3,991,183 $3,898,608 2.4% $92,575 $1,354,831 $1,297,778 4.4% $57,0543 Total $4,289,575 $4,337,026 -1.1% -$47,451 $1,464,032 $1,429,428 2.4% $34,6044 Total $4,251,485 $4,125,500 3.1% $125,986 $1,390,587 $1,316,302 5.6% $74,2866 Total $3,628,937 $3,720,568 -2.5% -$91,631 $1,208,605 $1,221,012 -1.0% -$12,4077 Total $3,711,165 $3,754,384 -1.2% -$43,220 $1,211,802 $1,196,657 1.3% $15,1448 Total $3,948,907 $3,705,808 6.6% $243,099 $1,308,775 $1,254,397 4.3% $54,3799 Total $3,930,688 $3,655,336 7.5% $275,352 $1,303,591 $1,210,306 7.7% $93,28410 Total $3,771,869 $3,644,704 3.5% $127,165 $1,265,614 $1,213,304 4.3% $52,31018 Total $3,537,064 $3,038,080 16.4% $498,984 $1,135,236 $948,980 19.6% $186,25519 Total $3,608,933 $3,629,134 -0.6% -$20,200 $1,173,522 $1,160,850 1.1% $12,67220 Total $2,326,933 $2,306,186 0.9% $20,747 $762,275 $753,946 1.1% $8,33021 Total $2,473,317 $2,386,926 3.6% $86,391 $794,204 $759,849 4.5% $34,35522 Total $2,436,754 $2,450,738 -0.6% -$13,985 $798,603 $799,536 -0.1% -$93323 Total $155,449 $22,882 579.4% $132,568 $47,170 $5,842 707.4% $41,327Grand Total $49,855,415 $48,473,416 2.9% $1,382,000 $16,522,370 $15,831,215 4.4% $691,156

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…Followed by this slide

District Store # Hannaford Location Category Dollars TY

Category Dollars LY

% Chg $ Chg Hershey Dollars TY

Hershey Dollars LY

% Chg $ Chg

1 241 Belfast Me Hrd $487,841 $455,030 7.2% 32,810 $165,249 $149,831 10.3% 15,4181 173 Brewer Me Hrd $427,816 $407,992 4.9% 19,824 $143,511 $132,155 8.6% 11,3561 155 Millinocket Me Hrd $151,647 $148,683 2.0% 2,964 $54,903 $48,397 13.4% 6,5061 152 Bucksport Me Hrd $186,845 $178,664 4.6% 8,181 $70,005 $63,951 9.5% 6,0551 107 Broadway Me Hrd $387,743 $388,352 -0.2% (610) $129,538 $125,382 3.3% 4,1571 128 Machias Me Hrd $202,081 $204,782 -1.3% (2,701) $70,160 $66,276 5.9% 3,8841 110 Hogan Rd Me Hrd $180,195 $179,436 0.4% 759 $62,996 $60,067 4.9% 2,9291 224 Bar Harbor Me Hrd $193,498 $179,637 7.7% 13,861 $65,800 $63,019 4.4% 2,7811 133 Old Town Me Hrd $420,791 $421,036 -0.1% (245) $143,377 $141,735 1.2% 1,6421 151 Camden Me Hrd $180,388 $181,678 -0.7% (1,290) $63,126 $62,866 0.4% 2601 140 Lincoln Me Hrd $139,922 $147,179 -4.9% (7,257) $51,158 $52,695 -2.9% (1,537)1 123 Ellsworth Me Hrd $430,957 $442,193 -2.5% (11,237) $142,974 $148,639 -3.8% (5,664)1 109 Airport Mall Me Hrd $403,433 $462,876 -12.8% (59,443) $140,726 $148,017 -4.9% (7,291)

Drill down by store to share successes and discuss opportunities.Look for a common opportunities amongst all stores and get approvalfrom Hannaford operations on a solution to increase sales.

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These 20 items are approved for distribution in ALL confection planograms at Hannaford. Make sure they are tagged and in stock during every store call

Hannaford Confection planograms October 2008 – October 2009

UPCHRD Code Name

3400056002 301150 TWIZZLER STRAWBERRY 16OZ

3400001610 372631 HERSHEY MLK CHOC NUGGETS 12OZ

3400003210 377184 HERSHEY DK CHOC ALMOND NUGGETS 12 OZ

3400011660 7103807 REESES PIECES 17.25OZ

3400012180 7099567 HERSHEY RICH DK CHOC KISSES 12OZ

3400012623 300558 HERSHEY KISSES W CARAMEL 11OZ

3400044860 300434 HERSHEY REESES PB CUP MINIATURES 12OZ

3400021303 300590 HERSHEY ASST MINIATURES 12OZ

3400013000 7152937 HERSHEY KISSES 12OZ

3400014901 378919 HERSHEY BLISS DK CHOC 9.6OZ

3400029005 300376 HERSHEY MILK BAR 6PK

3400029105 300368 HERSHEY ALMOND BARS 6PK

3400049005 301622 REESES PEANUT BUTTER CUP 6PK

3400040568 302471 HERSHEY REESES PB CUPS 8PK

3400004878 321273 HERSHEY ALMOND J OY 8PK

3400008788 7152978 HERSHEY KIT KAT 8PK

3400017038 7110745 HERSHEY MILK CHOC GIANT BAR 4.4OZ

3400017115 7110711 HERSHEY MILK CHOC W ALMND GIANT BAR 4.25OZ

3400071401 7102221 BREATHSAVERS PEPPRMNT 5PK PEG

1070070216 7103112 GOOD N PLENTY BG 7OZ PEG

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

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

Product Rank Sales ($)HERSHEY MILK CHOC BARS 9.3OZ UN (0003400029005.:300376) 1 1,196,646REESES PB CUP SNACK SZ 10.5O UN (0003400040211.:307090) 2 514,048KIT KAT SNACK SIZE 10.7O UN (0003400008752.:370007) 6 341,225TWIZZLERS STRAWBERRY 16OZ UN (0003400056002.:301150) 9 308,129REESES PNUT BTR CUP MINI 12OZ UN (0003400044860.:300434) 13 212,171YORK MINIATURES 12OZ 12OZ UN (0003400004752.:300608) 15 203,357HERSHEY KISSES 12OZ UN (0003400013000.:7152937) 16 187,789REESES PBC 8-PACK 4.4OZ UN (0003400040568.:302471) 17 181,524HERSHEY MINIATURES 12OZ 12OZ UN (0003400021303.:300590) 18 169,886HERSHEY SPECIAL DRK 6P 8.7OZ UN (0003400024502.:300574) 23 153,717REESE KNG SZ PNUT BTR CP 2.8OZ UN (0003400000480.:321158) 24 153,120HERSHEY MLK CHOC NUGGETS 12OZ UN (0003400001610.:372631) 25 149,553YORK MINIATURES 19.75OZ 19.7O UN (0003400004581.:303271) 26 145,982REESES PEANUT BTR CUP 9Z 9OZ UN (0003400049005.:301622) 29 141,616REESE PNT BTR STND BAR 1.5OZ UN (0003400000440.:321182) 32 135,418HRSH DK ALMND NUGGT 12OZ UN (0003400003210.:377184) 33 133,481HSHY MLK CHOC KI 19.75 19.7O UN (0003400012031.:303206) 35 131,131RSES PNUT MINI 19.7O UN (0003400044571.:303263) 38 129,392HRSHY MILK CHOC ST BAR 1.55O UN (0003400000240.:320929) 39 127,979HERSHEY RICH DARK KISSES 12OZ UN (0003400012180.:7099567) 48 119,487

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Hannaford’s First Half 2009 Plan

February Displays of V Pkg

Std Bar Displays

Demo: Winter S’Mores Demo Coordinator will hand out coupons for $1.50 off two 6pks 2/15 & 2/21

Big Boxes 5/$5 2/1-5/2 144ct shipper

March Displays of E Pkg

Bliss Module in support of TV Ad and FSI 3/1

Summer: Bonus Twizzlers & Bonus Standard Bars

Big Boxes 5/$5 2/1-5/2 spinner rack display

Gum/Mint FSI Spinner rack display of IB Bottle Pks

April Displays of E Pkg

Pkg 12oz $3.49 Apr – Sept Night 300ct mod

Summer: Bonus Twizzlers & Bonus Standard Bars, Rse and KitKat Snack, Milk 6pks

Big Boxes 5/$5 2/1-5/2 144ct shipper

Demo: IB Bottle Pks to include new white 4/4

On line coupons: Pkg, Std and Big Boxes 4/5 - 4/11: Details pending

May Pkg 12oz $3.49 Apr – Sept Bonus 300ct mod

Summer: Bonus Twizzlers & Bonus Standard Bars, Rse and KitKat Snack, Milk 6pks 5/17 FSI $1 off 6pk, Honey Maid or Jet Puff

Mother’s Day Co-Marketing Event supported with Bliss 150ct Mods (FSI 5/3)

Hannaford Fresh Magazine will feature Starbucks - find creative locations to display

On line coupons: Pkg, Std and Big Boxes 4/5 - 4/11: Details pending

June Summer: Bonus Twizzlers & Bonus Standard Bars, Rse and KitKat Snack, Milk 6pks & King Shippers

Reese’s Loves You Back Std Bar Shippers

Hannaford Fresh Magazine will feature Starbucks - find creative locations to display

On line coupons Reese’s Std Bars: June & July: Details pending

In order of priority

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Thanks!