HSYHershey

We note your disclosure that among other things, "negative macroeconomic conditions, including inflation on inputs to consumer products" is a current trend impacting your business. In future filings, please expand your disclosures to identify the principal factors contributing to the inflationary pressures the company has experienced and clarify the resulting impact to the company, if material.

Rest of the question

Please also identify specific actions planned or taken, if any, to mitigate inflationary pressures

The Company acknowledges the Staff's comment and respectfully advises the Staff that, in future periodic filings beginning with the Company's Form 10-K for the period ended December 31, 2023, the Company will expand existing disclosures regarding the principal factors contributing to inflationary pressures and the resulting impact to the Company if such known trends are quantifiable and have a material impact or are reasonably likely to cause our reported financial information not to be necessarily indicative of future operating results or of future financial condition.

Rest of the answer

Additionally, the Company will expand existing disclosures to identify specific actions planned or taken to mitigate inflationary pressures.

The Hershey Company | Page 1

For added context with respect to negative macroeconomic conditions, as noted in our Form 10-K, cost of sales increased 20.3% in 2022 compared with 2021, outpacing our net sales growth of 16.1% for the same period. Despite specific actions taken to mitigate inflationary pressures, higher prices for direct materials used to manufacture our products was the primary incremental cost and drove gross margin pressure during the year ended December 31, 2022. We use many different commodities for our business, including cocoa products, sugar, corn products, dairy products, wheat products, peanuts, almonds, natural gas and diesel fuel. Our commodities are subject to price volatility. For example, market prices for all of our exchange traded commodities increased during the year ended December 31, 2022, ranging from approximately 3% to 11% based on commodity type. Further, we continued to experience rising market prices during the nine months ended October 1, 2023, particularly for cocoa products and sugar which have increased approximately 32% and 31%, respectively, during 2023. Although we use forward contracts and commodity futures and options contracts where possible to hedge commodity prices, commodity price increases ultimately result in corresponding increases in our raw material and energy costs. We will continue to monitor and revise disclosures accordingly in future filings if trends such as the illustrative ones noted here, or the Company's specific planned actions, have a material impact, or are reasonably likely to have a material impact, on our operations or results.

Read in the reply ↗

We note your discussion of your results of operations, starting on page 24, that qualitatively describes multiple factors that impacted these line items in each respective reporting period. For example, your discussion of the year over year drivers of cost of sales increase "was driven by higher sales volume, higher supply chain inflation costs, including higher logistics and labor costs and an incremental $40.8

Rest of the question

million of unfavorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases. Additionally, the increase was partially offset by favorable price realization and supply chain productivity." In future filings, please revise to further describe material changes to a line item in both quantitative and qualitative terms for each disclosed component, including the impact of offsetting factors. Refer to Item 303(b) of Regulation S-K.

The Company acknowledges the Staff's comment and respectfully advises the Staff that, in future periodic filings beginning with the Company's Form 10-K for the period ended December 31, 2023, the Company will expand applicable disclosures to describe material changes to a line item in both quantitative and qualitative terms, including the impact of offsetting factors.

Rest of the answer

The Company expects that the elements included in the disclosure on which the Staff commented will change quarterly based on the materiality of the underlying reasons and offsetting changes for such performance.

***

If you require additional information or have any questions, please call me at (717) 508-3082.

Read in the reply ↗

We note that you generally refer to future climate-change related investments and priorities in your proxy statement. If material, please describe and quantify material planned expenditures in your annual report.

The Company acknowledges that climate change is a risk to our business and our planet and advises the Staff that the climate-change related investments and priorities referenced on page 15 of the 2021 Proxy Statement outlines how the Company is actively addressing these risks. In 2020, we introduced new science-based targets to increase our manufacturing efficiencies and the use of renewable energy, and to reduce deforestation, emissions, waste and packaging.

Rest of the answer

While the Company has made progress on these initiatives, the majority of these commitments are long-term in nature and will be implemented over the next nine years to meet our 2030 goals. The Company has not experienced material climate-change related expenditures to date and our planned expenditures are not expected to be material; however, we will continue to monitor and revise disclosures accordingly for material planned expenditures in future Annual Reports on Form 10-K.

Read in the reply ↗

To the extent material, discuss the indirect consequences of climate-related regulation or business trends, such as the following: • decreased demand for goods that produce significant greenhouse gas emissions or are related to carbon-based energy sources; • increased demand for goods that result in lower emissions than competing products; and • increased competition to develop innovative new operational or

Rest of the question

production processes that result in lower emissions.

The Company acknowledges the indirect consequences of climate change on our business, including those resulting from changes in regulation and other business trends, and has disclosed risks related to such consequences within Part I, Item 1A, “Risk Factors,” of our Form 10-K. The Company has not experienced material indirect consequences to date; however, we will continue to monitor and revise disclosures accordingly in future filings if such activity has a material impact on our business.

The Company's consumer research has indicated that, while consumers generally support products that are

Rest of the answer

considered more sustainable and result in lower greenhouse gas emissions, climate-related issues have not significantly impacted the demand for our products or significantly influenced the purchase decision of the consumer. As noted in Part I, Item 1A, “Risk Factors,” of our Form 10-K, the Company's raw materials used to produce our products may be adversely impacted by climate change, natural resource scarcity and extreme weather. As a result, the Company has prioritized its actions and commitments regarding climate change in an effort to mitigate the risk to our business and our planet. Finally, the Company has not experienced material competition to develop innovative new operational or production processes that result in lower emissions.

Read in the reply ↗

If material, discuss the significant physical effects of climate change on your operations and results. This disclosure may include the following: • quantification of material weather-related damages to your property or operations; • any weather-related impacts on the cost or availability of insurance.

The Company advises the Staff that we have not experienced significant physical effects from climate change to date, including material weather-related damages to our property and/or operations or material weather-related impacts on the cost or availability of insurance. We will continue to monitor and revise disclosures accordingly in future filings if such activity has a material impact on our operations or results.

Rest of the answer

Furthermore, the Company has disclosed risks related to the potential adverse impacts climate change may have on our business within Part I, Item 1A, “Risk Factors,” of our Form 10-K (specifically, risks of disruptions to our manufacturing operations or supply chain and increases in raw materials and energy costs).

Read in the reply ↗

Quantify any material increase in compliance costs related to climate change.

The Company advises the Staff that we have not experienced a material increase in our compliance costs related to climate change to date and we do not currently expect a material increase in compliance costs in the future; however, we will continue to monitor and revise disclosures accordingly to provide context related to our compliance costs and, if material, will address such costs in future filings. Read in the reply ↗

If material, provide disclosure about your purchase or sale of carbon credits or offsets and any material effects on your business, financial condition, and results of operations. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.

The Company advises the Staff that purchases or sales of carbon credits or offsets have not been material to date and have not materially affected the Company's business, financial condition or results of operations. For further context, the Company advises the Staff that as referenced on page 47 of the Company's 2020 Sustainability Report, the Company purchased zero-emissions credits that reduced our Scope 2 greenhouse gas emissions in 2020 compared to the prior year.

Rest of the answer

The value associated with these zero-emissions credits did not have a material impact on the Company's financial condition or results of operations. Additionally, the Company does not sell carbon credits or have any other material offsets. The Company advises the Staff that it will continue to monitor its carbon credit and/or offset activity and will revise disclosures accordingly in future filings if such activity has a material impact on our business, financial condition or results of operations.

***

If you require additional information or have any questions, please call me at (717) 508-3082.

Read in the reply ↗

We note your response to prior comment 1 states that you have not experienced material climate-change related expenditures to date and your planned expenditures are not expected to be material. Tell us more about the nature of your climate-change related expenditures and provide us with an analysis supporting your statement that the related amounts are not material.

The Company advises the Staff that the nature of our climate-change related investments and expenditures primarily relates to the following:

•50% absolute reduction in Scope 1 and 2 greenhouse gas (“GHG”) emissions by 2030 against a 2018 baseline. We seek to meet our Scope 1 and 2 reduction commitment through investing in renewable energy and increasing energy efficiency. To date, we have entered into two power purchase agreements that have enabled the construction of two new utility-scale solar farms, and an additional power purchase agreement is in the final stages of negotiation.

Rest of the answer

Our expenditures associated with these power purchase agreements represented less than 1% of each of our consolidated cost of sales and selling, marketing and administrative expenses for the year ended December 31, 2020. Ongoing expenditures related to this commitment through 2030 are currently expected to be less than 1% of each applicable year’s consolidated cost of sales and selling, marketing and administrative expenses.

The Hershey Company | Page 1

•25% absolute reduction in Scope 3 GHG emissions by 2030 compared to 2018. Approximately 42% of our baseline Scope 3 emissions are due to land-use change predominately related to the sourcing of our raw materials and ingredients. As a result, we have adopted a commitment to eliminate deforestation from all our ingredient supply chains by 2030. The GHG impacts of land-use change are most pronounced in our cocoa supply chain, a catalyst for our Cocoa For Good strategy that was launched in 2018 to address social and environmental challenges in cocoa communities, including deforestation. Through this program, some of the specific climate-related activities we support include helping farmers secure land titles where they farm, spreading climate-positive farming methods and investing in protecting the ecosystems where cocoa is produced. Our expenditures associated with deforestation represented less than 1% of each of our consolidated cost of sales and selling, marketing and administrative expenses for the year ended December 31, 2020. Ongoing expenditures related to this commitment through 2030 are currently expected to be less than 1% of each applicable year’s consolidated cost of sales and selling, marketing and administrative expenses.

•100% of plastic packaging to be reusable, recyclable or compostable and 25 million pounds of packaging to be eliminated by 2030. Approximately 5% of our baseline Scope 3 emissions are due to packaging waste, as well as the production and disposal of packaging. As a result, we have adopted commitments focused on reducing the environmental footprint of our packaging by 2030. Our expenditures associated with these packaging initiatives represented less than 1% of each of our consolidated cost of sales and selling, marketing and administrative expenses for the year ended December 31, 2020. Ongoing expenditures related to this commitment through 2030 are currently expected to be less than 1% of each applicable year’s consolidated cost of sales and selling, marketing and administrative expenses.

We also continue to expand our efforts to report on the Task Force on Climate-related Financial Disclosures and the UN Guiding Principles Reporting Framework.

Our aggregate climate-change related investments and expenditures, including climate-change related compliance costs as set forth in our response to comment 3, represented less than 1% of each of our consolidated cost of sales and selling, marketing and administrative expenses for the year ended December 31, 2020. Aggregate ongoing expenditures related to our commitments through 2030 are currently expected to be less than 1% of each applicable year’s consolidated cost of sales and selling, marketing and administrative expenses. The Company advises the Staff that it will continue to monitor all climate-change related expenditures and will update disclosures accordingly in future filings if such activity has a material impact on our business, financial condition or results of operations.

Read in the reply ↗

Provide us with additional detail supporting the statement made in response to comment 3 that you have not experienced significant physical effects from climate change to date, including with regard to weather-related damages to your property or operations and the weather-related impact on the cost or availability of insurance. Provide quantitative information with your response.

The Company advises the Staff that we regularly review all capital spending, as well as repairs and maintenance by location, type and justification of spend. For example, capital expenditures were $441.6 million in 2020, $318.2 million in 2019 and $328.6 million in 2018. During these time periods, there were no capital projects approved or expended as a result of weather-related damages to our property or operations.

Rest of the answer

Additionally, repairs and maintenance represented less than 1% of each of our consolidated cost of sales and selling, marketing and administrative expenses in these years and consisted primarily of general repairs and maintenance on our buildings, machinery and equipment, which did not include any significant repairs and maintenance as a result of weather-related damages to our property or operations. Finally, we have not experienced any issues regarding the availability of our insurance coverage. While insurance rates vary by location, the Company’s property insurance premium is typically based on a multi-year agreement (paid annually) and generally represents less than 1% of each of our consolidated cost of sales and selling, marketing and administrative expenses. To date, we have not experienced a significant increase in the cost of our property insurance. For instance, the cost of our existing property insurance

The Hershey Company | Page 2 from fiscal 2019 to fiscal 2020 increased by less than $1.0 million, which was deemed immaterial to our consolidated financial statements for the year ended December 31, 2020. We will continue to monitor and update disclosures accordingly in future filings if such activity has a material impact on our business, financial condition or results of operations.

Read in the reply ↗

Your response to prior comment 4 states that you have not experienced a material increase in your compliance costs related to climate change to date and do not currently expect a material increase in compliance costs in the future. Tell us about the compliance costs you have incurred and explain how you concluded the related amounts were not material.

The Company advises the Staff that our climate-change related compliance costs relate primarily to statutory and regulatory environmental licenses and permits. The cost of acquiring and maintaining such licenses and permits represented less than 1% of our consolidated cost of sales for the year ended December 31, 2020. Environmental regulations applicable to the Company have not significantly changed over recent years, and we are not aware of any pending material changes. As such, we do not currently expect a material increase in climate-change compliance costs in the future.

Rest of the answer

As noted in our response to comment 1 above, the Company has made voluntary commitments to reduce our environmental impact, and although these commitments are not mandated by statute and do not represent compliance costs, the costs for such climate-change related investments and expenditures are as disclosed above.

Read in the reply ↗

We note from your response to prior comment 5 that you purchased zero-emissions credits that reduced Scope 2 greenhouse gas emissions in 2020. Please quantify the amounts expended for the purchase of these zero-emissions credits for us.

The Company advises the Staff that we purchased approximately 215,000 megawatt hours of zero-emission credits in 2020. The amount expended for the purchase of these zero-emissions credits represented less than 1% of our consolidated cost of sales for the year ended December 31, 2020. The Company further advises the Staff that it will continue to monitor its zero-emissions credit activity and will update disclosures accordingly in future filings if such activity has a material impact on our business, financial condition or results of operations.

***

If you require additional information or

Rest of the answer

have any questions, please call me at (717) 508-3082.

Read in the reply ↗