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
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.
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.