Her­shey Will Take Lessons from In­dia to Global Mar­kets: CEO

Co’s earn­ings re­port said the prof­itable range of prod­ucts from In­dia grew 40% in the lat­est quar­ter

The Economic Times - - Brands: Creating Desire - Ratna.Bhushan@ times­group.com

New Delhi: The Her­shey Com­pany chief ex­ec­u­tive Michele Buck has said the US con­fec­tionery maker will take learn­ings from In­dia to in­ter­na­tional mar­kets such as China, for prod­ucts like syrups, spreads and for­ti­fied milk.

“From In­dia, where we have evolved our port­fo­lio, shift­ing to higher-mar­gin, value-added prod­ucts to strengthen our busi­ness model. We are shar­ing th­ese learn­ings with our team in China, which is fo­cused on do­ing the same,” said Buck in the choco­late maker’s quar­terly earn­ings.

The earn­ings re­port said the prof­itable range of prod­ucts from In­dia grew 40% in the lat­est quar­ter, in­clud­ing Her­shey’s Syrups, spreads and milk­shakes, the rel­a­tively newer Brook­side pre­mium choco­lates and Sofit soy milk.

Pa­tri­cia Lit­tle, global chief fi­nan­cial of­fi­cer, said in the earn­ings call, “Con­stant cur­rency net sales in In­dia in­creased about 2%, in line with our plan. Im­por­tantly, growth in the brands we’re in­vest­ing in has in­creased by more than 40%. We are on track to ex­pand gross mar­gins here by 1,000 ba­sis points in 2017. This is en­abling in­vest­ments in the marketplace that should re­sult in a sus­tain­able oper­at­ing model.”

Her­shey In­dia, wholly-owned sub­sidiary of the US firm, is rel­a­tively smaller than ri­val com­pa­nies Nes­tle and Amul, which op­er­ate in sim­i­lar cat­e­gories. The In­dia port­fo­lio in­cludes syrups, spreads and milk ad­di­tives, soya milk un­der the Sofit brand, Brook­side choco­lates, con­fec­tionery brand Nutrine and Jumpin juices. Terming In­dia a core mar­ket — along with Mex­ico and Brazil, where it is mak­ing mea­sured in­vest­ments — Buck said, “We’re see­ing sig­nif­i­cant marketplace gains while im­prov­ing on oper­at­ing in­come trends.”

Praveen Jakate, man­ag­ing di­rec­tor, Her­shey In­dia, said the com­pany planned to ex­pand dis­tri­bu­tion and build on con­sumer aware­ness, in­clud­ing ex­pan­sion into high growth cat­e­gories and cre­at­ing lo­cally rel­e­vant prod­ucts.

GLOBAL EARN­INGS

The com­pany re­ported sec­ond quar­ter net sales de­cline of 3.6% to $186 mil­lion for its in­ter­na­tional seg­ment. It said sales in the re­gion were im­pacted by cur­rency fluc­tu­a­tions, de­spite net sales growth in Mex­ico, Brazil and In­dia.

Her­shey’s net sales for the quar­ter were greater than es­ti­mated, although on a con­stant cur­rency ba­sis, lower com­pared to the cor­re­spond­ing year-ago quar­ter.

FILE PHOTO

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