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Hershey expects huge growth from international markets

February 25th, 2011

US confectionery manufacturer Hershey claims its growth levels are on pace to achieve $1bn international net sales – outside of North America – by 2015.

Hershey CEO David West and the company’s chief operating officer, JP Bilbrey, said that continued investment in emerging markets with the most potential while continuing to ensure a regionally relevant portfolio would secure such gains within the allocated five year timeframe.

They were participating in the 2011 Consumer Analyst Group of New York (CAGNY) conference yesterday.

Net sales in 2010 for the confectionery maker showed a 7 per cent gain on 2009 revenue, with certain product categories such as gum and chocolate showing increased market penetration.

And West revealed that he expects 2011 net sales for Hershey, which has a 43 per cent share of the US chocolate market and a 50 per cent share of the confectionery retail aisle space, to be around the top of the long term 3-to-5 per cent and 6-to-8 per cent objectives.

He claims the confectioner’s strong and repeatable business model is fuelling US and international growth, along with its decision to focus product innovation on ‘fewer, bigger ideas.’

In terms of emerging market growth, China net sales were up 50 per cent in both 2009 and 2010, reported the US manufacturer. In India, the company has designed its portfolio to meet relevant price points and local coinage, with rapid growth for Hershey’s chocolate range reported there – 21.5 per cent CAGR between 2006 and 2010.

Meanwhile, Kraft Foods, speaking at the same conference, said that it is facing a huge increase in commodity prices but pledged to shield its customers at the supermarket checkout.

The manufacturer, which acquired Cadbury in early 2010, said that rising prices for grains, wheat, and rice could add as much as $700m to $800m this year to the company’s overall costs in North America.

 

Source: Confectionery News

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