Have a break, read about KitKat!
We all know that Nestle owns KitKat, so how does Hershey's come into the picture?
KitKat is amongst the most consumed chocolate in the world, but have you ever noticed the difference in packaging and branding of KitKat in the US and any other country it is sold in?
KitKat was created by ‘Rowntree's,’ a British Confectionery Business in York, England.
As the brand KitKat grew in 1970, Rowntree's came into an agreement with Hershey's, an American MNC, to expand in the US. As a result, Rowntree sold its right to manufacture and distribute KitKat in the US to Hershey's in perpetuity.
In 1988, Nestle, acquired Rowntree, and through that KitKat, giving Nestle global control over KitKat.
Nestle honoured the deal with Hershey's and sold KitKat everywhere except the US, but with a stipulation that Nestle will regain the rights of KitKat as soon as Hershey's is sold.
Although KitKat is among the top-selling chocolates in the US, it soon became a problem for Hershey's. When ‘Hershey’s Trust Company’ which is the owner of Hershey's, tried to sell its controlling interest in Hershey Food Corporation in 2002, it was not able to find itself a serious buyer as it would also lose the rights to KitKat which consists of a sizable market share in the US.
Even Nestle rejected Hershey's asking price!
So, whether KitKat is profitable for Hershey's or not, it's for you to decide!
By- Itika Singal
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