• Business Week, Friday, October 16, 2009 10:43 AM

Matthew Boyle writes that Hershey's request on its Web site for "big ideas" from the crowd is well advised considering the fact that innovation at the chocolatier seems to be all but dead. It's R&D budget is just 0.5% of sales, resulting in just 40 new products thus far this year. In the mid-2000s, Hershey regularly launched over 200 products a year, according to Mintel.

Net sales are up, to be sure, but that's mostly due to huge price hikes that mask a 3% drop in sales. The "stubbornly conservative stance" of the Hershey Trust, which controls about 80% of the voting shares of the company, is one reason creative people don't like to work "in such a stifling environment." New-product guru Andrea Thomas, for example, jumped to Wal-Mart a couple of years ago.

"I don't think the company is troubled, but they are frittering away a great brand name," says William Madway, a marketing lecturer at the Wharton School of the University of Pennsylvania. "They're still stuck in the 1800s."

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