China is the place to be selling chocolate during the next decade, and The Hershey Co. is positioned to take full advantage of the exploding market.
A senior executive with The Hershey Co. recently predicted that overall chocolate sales in China will grow to $4.3 billion by 2019, up nearly 60 percent from $2.7 billion in 2014. The need is being driven by demand from 1.3 billion Chinese.
Hershey, through its 2014 acquisition of Chinese candy-maker Shanghai Golden Monkey Food Co., is forecasting major financial gains in China.
Phil Stanley, Hershey’s vice president and general manager of Greater China, answered a few questions from the Business Journal about the company’s China plans.
Q: What are the financial projections for Hershey to grow in China over the next five years through Shanghai Golden Monkey?
A: Our business in China continues to grow and evolve. It’s our fastest-growing business, and we are the fastest-growing confectionery company in China. We had a 9.6 percent share of China’s chocolate market in 2014, a share gain of 1.7 points, and reached a market share of about 11 percent of the chocolate category in China in Q4 2014.
We estimate that China will generate about $450 million in sales in 2015, including the sales from our newly acquired Shanghai Golden Monkey.
How important is this market to the future growth of The Hershey Co.?
China is a key growth market for The Hershey Co., and our China business’s continued strong performance is driving our international growth.
How can Hershey continue to position itself to best capture the projected $4.3 billion in China chocolate sales in 2019?
The key is to penetrate the major urban markets in China. More than 50 percent of the emerging market population will live in urban areas in the years ahead, and China is expected to add 400 million people to its cities by 2025.