Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Contributed Topics from U-Z

Wolfe, Kenneth - Overview, Personal Life, Career Details, Chronology: Kenneth Wolfe, Social and Economic Impact

hershey company market products

(1939-)
Hershey Foods Corporation

Overview

A company loyalist of the venerable American firm Hershey Foods Corp., Kenneth L. Wolfe dared to expand the chocolate maker into products and markets that have never been attempted. In a few years, Hershey’s revenues have dramatically increased, and the company has positioned itself to be a major player in the world confectionery market. Wolfe’s management skill and decisive style has been a key factor in Hershey’s revival.

Personal Life

Kenneth Wolfe was born in 1939. A native of Lebanon, Pennsylvania, Wolfe grew up less than 10 miles from the Hershey, Pennsylvania, headquarters of the confectionery firm he would later head. He attended Yale University where he was a halfback on Yale’s last undefeated and untied football team in 1960. He received his B.A. degree in 1961. He went on to earn his M.B.A. in finance from the University of Pennsylvania in 1967. Wolfe is married. He was described as “reserved and understated” in a 1997 Forbes article. The article commented that Wolfe is “not a natural born-born huckster.”

Wolfe has described himself as a numbers person: “I enjoy numbers. I’m not a vision person; I would be more of a detail person.” As for his management style, Wolfe explains, “I like the notion of teamwork. Sometimes there are small teams, sometimes there are larger teams. Obviously, if things do not go well, I’m solely responsible for that, and I understand that. I’m not the world’s toughest boss, though some people might disagree.”

Wolfe serves on various boards, including Hershey Foods, Hershey Trust Co., the Milton S. Hershey School, Pennsylvania State University Hershey Medical Center, Bausch & Lomb Inc., the Business Roundtable, the Caron Foundation, and Grocery Manufacturers of America Inc.

Career Details

Before pursuing his M.B.A., Wolfe began his career with the Bankers Trust Corp in 1961. After graduating from the University of Pennsylvania, Wolfe joined the Hershey Foods Corps. in 1968. He held a variety of positions at the corporate level and in the chocolate company subsidiary. An assistant treasurer from 1968 to 1969, he became the budget director from 1969 to 1974. Wolfe was then promoted to director of operations and financial analysis in 1974, treasurer in 1976, vice president of financial administration for the Hershey Chocolate Co. in 1980, vice president and chief financial officer in 1981, senior vice president in 1984, and president and chief operating officer from 1985 to 1993. Wolfe was finally named chairman and CEO in January 1994. By this time he had been with the company for over 25 years.

When Wolfe took over the company, Hershey was complacent with its nearly one-third share of the U.S. candy market, but, except for its pasta business with such brands as Ronzoni and San Giorgio, the company had a record of shunning diversification and ignoring overseas markets. Though Wolfe describes himself as being more comfortable with numbers than with visions, he outlined his plan in a 1994 Central Penn Business Journal article. When asked to compare his vision with his predecessor’s he responded, “We’re going to emphasize development in the North American market. . . . We’re going to look at selected international markets. I am interested in developing our core brands—we’re going to do this by hopefully selling more of our core products, introducing new products and making acquisitions along the way.” Wolfe’s all-encompassing plan was based on experience; he explained, for example, that the need for selected expansion of the company was based on past mixed results. Wolfe’s tenure at Hershey was proving to be valuable to him as a leader, and within a few years, he reached every goal that he set.

Wolfe took on a $106 million tax charge to restructure and refocus Hershey’s operations. In the 1997 annual report to stockholders, Wolfe and chief operating officer Joseph Viviano reported a streamlining of the company’s interior structure. Wolfe had pared the structure of the company to three divisions: Business Units, Operations Shared Services, and Staff Shared Services.

In late 1995, Wolfe approved an 11 percent price hike—only the second in ten years—on Hershey’s standard candy bar line. To counter declining sales due to dietary concerns, Wolfe backed Sweet Escapes, a reducedfat chocolate bar that in its first year was expected to earn $100 million. Hershey also introduced the industry’s first reduced-fat baking chips in 1995. Announcing the appearance of the chips onto the market, Wolfe demonstrated an understanding of the consumer when he commented, “These chips are good enough to eat straight from the bag . . . and that’s important because many baking chips never make it into cookies!” In several interviews, Wolfe has emphasized the importance of responding to the demand for low-fat foods with good-tasting products.

Wolfe has also dared to take Hershey into non-chocolate candies. Acquiring Twizzlers licorice and Amazin’ Fruit gummy candies, Wolfe also bought confectioner Henry Heide, the maker of Jujyfruits, and in 1996 Hershey came out with its first-ever hard candy, TasteTations. Hershey has purchased the confectionery operations from Huhtemaki of Finland, whose brands include Jolly Rancher, Good & Plenty, Whoppers, and Milk Duds.

Chronology: Kenneth Wolfe

1939: Born.

1961: Graduated from Yale University.

1961: Worked for Bankers Trust Corp.

1967: Earned M.B.A. from the University of Pennsylvania.

1968: Began career with Hershey Foods Corp.

1969: Promoted to budget director.

1974: Promoted to treasurer.

1980: Promoted to vice-president and chief financial officer.

1985: Promoted to president and chief operating officer.

1994: Named chairman and chief executive officer.

In addition to bringing out new products, by 1997 Wolfe had successfully stimulated Hershey’s core brands as had promised from the beginning. The CEO attributed the improvement in the success of the core brands to the effective thematic advertising campaigns, including a movie tie-in and sports-related merchandising programs. Wolfe’s strategy for improving sales would have baffled company founder Milton S. Hershey, who never advertised during his lifetime.

Wolfe has emphasized development in the North American market, but true to his word, has tentatively begun to explore international markets in Western Europe, where per-capita consumption of confectionery products is much higher, Eastern Europe, Russia, and Asia. Hershey now exports to about 60 countries around the world. In 1995, Wolfe reorganized the three operations in the United States, Canada, and Mexico into Hershey North America to consolidate strategy and trim operational costs. Wolfe’s strategy has produced positive results. Hershey’s revenues increased from $3.5 billion in 1993 to $4.3 in 1997. Earnings posted similar gains for the period, rising from $193 million in 1993 to $336 million in 1997.

Wolfe, a self-described team player, has emphasized the importance of team work to the success of the Hershey organization. In an interview with Central Penn Journal in 1994, he was asked how he would characterize himself as a manager. Wolfe responded, “The job I enjoy most is when I have an opportunity to meet with all these people that work in this company and in some way to reward them or give them recognition. The other thing I like is to meet with the retired people who have contributed so much.” In May 1998, Wolfe received the Business Achievement Award from the West Shore Chamber of Commerce. In his acceptance speech, Wolfe exhibited his true belief in the team concept when he described the various employees that had come to him with ideas for improving various aspects of the company. Every few weeks Wolfe holds breakfast meetings in which he talks to various employees who are selected at random from departments throughout the company. During these meetings several employees had given him ideas or solved company problems, ranging from solutions for saving on light bulbs to finding a simple part to fix a chronic problem with a machine. In his speech, Wolfe told the audience that both the company’s balance sheet and its morale were benefiting from the input of various employees. As a result of the company’s success in 1996 and 1997, Wolfe was able to implement a new employee stock option plan that he felt would offer even more incentive for employees to participate in the company.

Social and Economic Impact

Wolfe has demonstrated that he has been willing to push an established company that already controlled a third of the confectionery market in new directions. He revived Hershey Foods Corp. by radically reorganizing its management structure, introducing new product lines, and expanding into new markets abroad. The effect was to make a strong company with an established brand name even stronger. Hershey has positioned itself for international competition and secured its future as an expanding multinational firm that caters to the tastes of a worldwide market for its products.

Kenneth Wolfe was not lured to Hershey with a high salary, but rather grew into a leadership role after decades of service to the company. Wolfe’s decisive and aggressive leadership has revitalized the venerable Hershey by strengthening its core brands, while diversifying into areas that its founder, Milton Hershey, would have had difficulty predicting. Wolfe recognized that mass-market tastes changed, and that Hershey needed to change with the times. Although chocolate remains the company’s mainstay, Wolfe has developed less fattening products and other candies for the assorted tastes of its customers. He is an example of the benefit of moving through the ranks in a company, gaining experience and learning along the way. Knowing Hershey’s past successes and failures as he did allowed him to move in new directions while keeping old Hershey values. Wolfe’s own favorite candy bar is an example of his strategy. He loves the traditional Reese’s Peanut Butter cups, but during his leadership, Hershey’s has released the new Reese’s Crunch Cookie Cups and Reese’s ReeseSticks Wafer Bars.

Wollaston, William Hyde [next] [back] Wolfe, George C.(1954–) - Playwright, director, producer, Chronology

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or