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September 2-3, 2009

2009 Cycle 10 Retail Execution Meeting

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Key Messages

Winning at Walmart is critical to Hershey’s success.

Our combined efforts have delivered CYTD results +16.0% versus prior year and core packtype conversion of 110%.

Implement current department 01 headquarter merchandising programs during cycle 10 & when programs sell down, transition all displays to Snack Size, Jumbo Snack & Assortment Bags.

Maintain all department 82 execution throughout Halloween

Executing the 2009 Halloween strategy is critical to achieving the 92% sell thru goals in both $ & units.

Hershey’s baking chips will be the opening price point at Walmart; however, due to aggressive retails of Nestle at $1.98 during the baking season, Hershey will not be the featured baking chip.

Pre-selling execution of the Fall Baking program is vital to the success of this $38M season

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CYTD performance is 16.2% over prior year; 5.2 pts over the plan

performance

Week TY

POS $ %Chg.

14.0%

Last 4

17.9%

Last 13

13.5%

CYTD

16.2%

Hershey Confectionery POS Dollar Percent Change

Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)

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Week TY

Impulse

TotalTakeHome

Seasonal

39.5%

14.0%

5.7%8.8%

Last 4

37.1%

17.9%

11.7%9.9%

Last 13

12.7% 13.5%13.8%

20.7%

CYTD

21.4%

16.2%

11.8%

23.1%

Take Home

Seasonal

Impulse

Total

CYTD performance is driven by strong Seasonal and Impulse performance

POS Dollar Percent Change by Segment

CYTY impacted by:

• TH CPC 10.1 - 18.9 oz. = +19.5%

• TH Pkg Choc > 30 oz = +33.5%

• TH Molded Bars = +38.8%

• IC King Size = +77.4%

• IC Standard= +14.6%

Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)

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Total

CYTDL4LW

11

0%

13

5%

13

2%

King/Large

168%

144

%15

7%

StandardBar

97%

178

%

179

%

8PK

13

5%

129

%

106

%

6PK

80

%

114

%

90%

CPC12 oz

111%

11

8%

119%

CPC20 oz

63%

51%

55%

Twizzler

99%

69

%

63

%

Giant Bars

112%

94%

94%

Overall unit conversion is @ 110% & is being driven by 2/$1 Std Bars & $1 King Size

RollbacksUnit Conversion Trends

CYTD 8-14-09

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South

POS $ Inc

$29.1

Northeast

$25.7

West

$22.4

Central

$28.0

105.6% 105.4% 105.3% 104.0%% Plan +(-)

14.9% 17.1% 17.3% 16.1%% TY +(-)

CYTD Area POS Change ($M)

Thanks to flawless execution by the retail team,

HSY POS is +$107M vs. YAGO

Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)

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NY

%vs.

Plan

11

0.5

%

Mia

109.3

%

Birmg

107

.1%

Atl

106.8

%

Clev

106.5

%

Phily

106

.4%

Ches

105

.9%

Bost

105

.6%

Nash

105

.6%

Syra

105.6

%

J 'ville

10

5.5

%

Char

105

.5%

Dal1

05

.4%

Pitt

104

.8%

Raleigh

104.8

%

Hsy

10

4.3

%

NO

10

4.2

%

Memp

10

4.0

%

Hou

10

3.7

%

NE

102

.9%

District % vs. Plan

All district’s in the Northeast and South areas are over plan

Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)

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LA

%vs.Plan

10

9.7

%

SF

10

9.2

%

Slc

10

7.2

%

SD

10

6.5

%

Den

105.8

%

Cincy

105

.8%

Phx

10

5.6

%

Stl

105.5

%

Chic

105

.0%

Mil

104

.3%

Indy

104.1

%

Sea1

04.0

%Ptl

10

3.7

%

KC

10

3.5

%

Det

103.2

%

Omh

103.1

%

Minn

10

2.9

%

GR

102

.1%

OC

102

.1%

SA

10

1.1

%

District % vs. Plan

All district’s in the Central and West areas

are over plan

Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)

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0

500

1,000

$1,500

LY

YTD

Rest of Year

$1,071.8

TY WM Plan (15.3%)

$1,247.6

$98

$78

$M Growth

16.2%

16.6%

% Chg

$470.5 $548.7Rest of Year$601.3 $698.9YTD

Hershey Confectionery POS ($M) YTD and Calendar Year

Source: Retail Link - Walmart Week 200928 (WE August 14, 2009)

To date POS is at 56% of the WM stretch plan target and will require a minimum ROY growth

level of 16.6%

Total WM POS plan is +16.4%

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Momentum must be maintained through critical 2nd Half promotions

Hlwn

POS($M)

$140

Holiday

$98

Std Bars

$43

8pks

$38

FallBaking

$38

King Sz

$25

GiantBars

$14

IB Gum& Mints

$14

$1 Aisle

$12

12ozPkg

$12

24ozSyrup

$7

Bliss

$4

KissesBaking

$6

29% 10% 24% 87% 11%15% 67% 15% 29% 57% 2% 27% 11%09 vs 08 % Chg

Walmart 2nd Half Promotional POS ($M) Estimates

Promotional $’s are 63% of our 2nd half POS plan of

+16.4%

Programs highlighted in gold are the focus

priorities during cycle 10

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It is critically important to deliver against the key growth drivers

Hlwn

DollarGrowth

$38.0

StdBars

$15.0

Holiday

$10.0

FallBaking

$8.6

King Sz

$8.0

8-Pks

$5.0

12ozPkg

$5.0

IB Gum& Mints

$3.0

Bliss

$2.0

24ozSyrup

$1.3

$1 Aisle

$1.2

KissesBaking

$0.6

GiantBars

$0.3

Walmart 2nd Half Promotional POS ($M) Growth Estimates

Programs highlighted in gold are the focus

priorities during cycle 10

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Program Highlights 2 TABS

October 4th – Harvest Assorted Miniatures October 24th – Tick or Treat focus, item featured TBD

FSI FSI – September 27th Incremental FSI – October 18th

$1 off with the purchase of 3 snack size bags Advertising

GRP’s increased over 33% on core & seasonal brand ads Concentrated on last 4 weeks of the season

Retail Execution Contest August – October Winning district’s & RSR’s will include sell thru and displays metrics

2009 Halloween Merchandising Support

Current FSI 9/27

Incremental FSI10/18

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National FSI Support– 9/27 & 10/18 – $1.00 Off 3 Bags– 50 MM Circulation

2009 Halloween Support

National TV Support– 5 weeks; 9/28 – 10/31– Supported at growth level GRP’s– Hershey’s, Kisses and Reese’s advertising

Reese’s Halloween specific creative

10/189/27

Incremental Vs. ‘08

Walmart Co-op Details: (creative TBD)

Print - 9/27

- Early Season Support (Reese Harvest and Kisses Harvest 2/$5)TV - 10/5-10/31- Focus on Reese Peanut Butter Cups Snack Size Digital/Online - 9/2 - 10/31

FPO

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2009 Halloween Display StrategyDisplay Transition Strategies

September PrioritiesDuring September, all 8pks should be sold only from the modular to avoid the cannibalization of the Halloween snack size strategy

Transition all 8pk secondary locations to either Halloween Snack Size, Jumbo Snack or Assortment Bags

CPC, 12oz – last SSO ships week 31 (Aug. 29-Sept.4) If your CPC, 12oz has sold down, transition to Bliss and/or Halloween displays

Bliss – SSO ships week 32, FSI drops week 34Ensure “A” displays and after Bliss sell down, transition to Halloween displays

We cannot let the stores kill the display space to merchandise other non Hershey Halloween itemsGain additional displays by leveraging the September 27th FSI on snack size

October PrioritiesAll secondary displays should be HalloweenGain additional displays by leveraging the October 10th FSI on snack sizeNo secondary 8pk displaysLast 2 weeks of the Halloween season, all secondary displays should be on or around the seasonal modular in the strike zone

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Cycle 10-11 Merchandising Strategy

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Standard Bar 2/$1 Rollback HighlightsWeeks: 18-39 Retail Strategy

Ensure all pallets/pdq’s are out on “A” displays & maintain displays throughout Halloween!

King Size $1.00 Rollback HighlightsYear long rollback

IB Gum & Mint Rollback HighlightsWeeks: 27-39

Retail Strategy for King Size & IB Gum & Mint SSO’s shipping to traited stores week 32 (September 5-11) Ensure all pallets & pdq’s are out on “A” displays As programs sell down during Halloween, transition to "B" locations

It is critical we maintain all department 82 execution’s throughout Halloween

Hershey Standard Bars deliver high lifts when promoted during

Halloween

Base

$/Store/Wk

$39

Early Season

$68

Late Season

$80

74% 103%Lift

Promoting Standard Bars during Halloween2008 Halloween – 3/$0.99 Promotion

Items:• Reese Std• Hershey Milk Choc• Hershey with Almd• Kit Kat• Reese Whipps

Periods• Base: 200830 - 32• Early: 200834 - 36• Late: 200837 - 39

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CPC, 12oz Rollback Highlights Weeks 27-36

Bliss Rollback Highlights Weeks 31-40 SSO delivers week 32 (September 5-11) FSI week 34 (September 20th) Features all Bliss SKU’s, plus Crème de Menthe & Bliss White Reese’s Select & Crème included in rollback, but not in SSO Sampling on Bliss Crème de Menthe & White Chocolate

Week 34 (September 24-27) Endcaps in selected stores (Store list will follow at a later date)

Strategies Ensure all drc’s are out on “A” displays As department 01 displays sell down, transition all display locations to

Halloween items

CPC, 12oz, Bliss & Reese’s Select Strategy

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2009 Projected POS $38M Incremental $8.6M or +29% Program Highlights

October - December 2009 An additional month vs. last year

Rollback pricing - $1.88 5 items on Baking Center

Reese’s PB, Heath Bits-o-Brickle, Special Dark Chips HSY Cocoa, 8oz & Kisses, 12oz

National FSI November 15 $1 off 3 bags of Hershey’s Baking Chips

Strategies Display activity will be sold at store level by the retail team

Leverage FSI at store level Due to competitive retails (Hershey @ $1.88, Nestle @ $1.98) Hershey will not

be the featured Baking Chip this Fall Hershey’s Baking Chips will be the low price leader

Target grocery endcaps, cart rail and action alley

2009 Baking Program

FSI 11/15

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3rd Quarter Programming

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Strategy Breakouts