When Coffee Dreams, It Dreams of Chocolate

Starbucks Coffee Company’s Global Consumer Products Group and The Hershey Company Announce Agreement to Launch Premium Chocolate Platform

Starbucks Coffee Company (Nasdaq:SBUX) and The Hershey Company (NYSE:HSY) today announced a development and distribution agreement that will help transform the premium chocolate segment. The companies will create and market a new Starbucks-branded premium chocolate platform in the United States starting this fall.

“Chocolate is the perfect complement to coffee and tea and has long been a part of the coffeehouse experience. We are excited to bring premium chocolate inspired by Starbucks coffee and cafe flavors to Starbucks customers and chocolate lovers,” said Gerry Lopez, president, Starbucks Global Consumer Products Group. “Creating a new chocolate platform is another way for us to extend the Starbucks Experience outside of our stores and enhances the coffeehouse experience.”

Expert chocolatiers are developing products that translate Starbucks coffeehouse flavors into delicious and distinct chocolate products. The premium platform will combine the highest quality chocolate with Starbucks beverages and cafe flavors, as well as delectable fruits, nuts, herbs and spices. In addition to innovative flavors, this platform will offer new forms and packaging and will be available in a broad range of retail channels such as food, drug and mass merchandise outlets across the United States.

The alliance will draw on the premium expertise of Artisan Confections Company, a wholly owned subsidiary of The Hershey Company. Artisan Confections’ unique portfolio consists of some of the world’s finest chocolate, including Scharffen Berger and the exquisite truffles of Joseph Schmidt.

“Starbucks is one of the world’s leading brands among consumers seeking a unique experience,” said Christopher J. Baldwin, Senior Vice President, President North American Commercial Group, The Hershey Company. “Hershey’s chocolate expertise, distribution and selling capabilities combined with the strength of the Starbucks brand will help transform the high-growth premium chocolate segment. Our product development is focused on value-added chocolate and coffee-based products that will provide consumers with a new experience and accelerate growth in this key segment. Customers clearly value the Starbucks brand, and early customer feedback has been outstanding.”

Cocoa beans, like coffee, are an agricultural product that affects the livelihood of many people around the world. Starbucks and Hershey share a passion and focus to purchase cocoa that is socially responsible, economically viable, ecologically sustainable and meets specific quality standards.

“Starbucks and Hershey share a deep dedication to making a positive difference in the communities where they live, work and do business,” said Thomas K. Hernquist, Senior Vice President, Global Chief Growth Officer, The Hershey Company. “We look forward to working together with Starbucks to extend our work that is making a meaningful difference in the lives of farm families in the world’s cocoa growing regions.”

Hershey is committed to promoting sustainable cocoa farming and plays a leadership role with industry partners, governments, international agencies and cocoa communities to develop programs that promote economic and social development and environmental conservation in cocoa-growing communities around the world. Hershey’s cocoa sourcing guidelines will help to improve farmer incomes, ensure responsible labor practices and protect the tropical ecosystem. Hershey also supports organizations such as The International Cocoa Initiative (ICI) and The International Foundation for Education & Self Help (IFESH). Both Starbucks and Hershey support the World Cocoa Foundation.

Starbucks has recently developed its Cocoa Practices Guidelines and Scorecard which are being piloted for a two-year period beginning June 1, 2007. The Cocoa Practices were developed to reflect Starbucks C.A.F.E. (Coffee and Farmer Equity) Practices, the Company’s coffee buying guidelines, and are similar in structure and criteria areas. The program is designed to evaluate and recognize producers of high-quality, sustainably grown cocoa. To become a Cocoa Practices supplier, farmers, processors and exporters must meet minimum requirements and demonstrate best practices which are subject to independent verification under the guidelines. Hershey’s and Starbucks will work together to pilot and implement these practices for this platform. To learn more about Cocoa Practices and Starbucks commitment to sustainable cocoa production, please visit www.starbucks.com/cocoa.