Quest for a New Chocolate Bar

In 1963, the Hershey Foods Corporation opened a new chocolate plant in Smiths Falls, Ontario, Canada, to manufacture products for the Canadian market. Contrary to expectations, Canadians did not like the Hershey brand of chocolate. By 1978, the plant was continuing to perform well below expectations. Hershey encountered fierce competition from companies who knew much more about Canadian tastes for chocolate and who had cultivated their preferences for many years. It was no wonder that there had been such a low return on Hershey's huge investment in Canada. It was such a difficult situation that some Hershey executives had lost faith in the Smiths Falls operation, and cries for closing down the plant were being heard louder and louder. On the other hand, other Hershey executives argued that it was not just the future of the plant that was at stake. This plant was Hershey's first incursion into manufacturing chocolate products for a specific foreign market. Closing down the plant would mean that millions of dollars already invested would go down the drain. It would also mean laying off hundreds of employees at a time when so many corporations were in dire financial conditions -- Hershey was no exception. The Great Depression was the worst that Hershey had seen, but the economic crisis of the 1970's was also very difficult. But worst of all, closing down the plant would mean that Hershey had to admit failure in its first international production venture.