Hershey India Pvt. Ltd, the Indian arm of US confectionary giant The Hershey Co., will invest $50 million in the country in the next five years, a top company executive said.
“We anticipate an investment of about $50 million during the next five years as we focus on growing and expanding our presence in India,” Praveen Jakate, chairman and managing director, Hershey India, said in a statement. “India is one of our key International focus markets and we are investing to build this important business.” The company declined to disclose how the funds would be utilized.
Hershey India sells 11 brands, including Hershey’s chocolate syrup, milkshake and chocolate almond spreads, along with Sofit soya milk and Jumpin juice, which it acquired from an erstwhile joint venture with Godrej Industries Ltd.
It plans to focus most of its investments now in brands owned by The Hershey Co. rather than in those brought from the joint venture, Jakate said in a previous media briefing.
In an earnings briefing on 30 October, The Hershey Co. said net sales in India grew 16% year-on-year during the September quarter, making it the fastest growing among Hershey’s core markets outside the US, which include Brazil and Mexico.
“Constant currency net sales in India increased 16% and slightly exceeded our plan. Growth in the brands we’re investing behind continues to be solid,” Patricia A. Little, chief financial officer of The Hershey Co., said in a press statement on 30 October. “Our transition of the India portfolio is enabling a higher margin business, and we are on track to expand gross margins here by 1,000 basis points in 2017.”
Hershey’s competitors in the chocolate confectionary market in India include market leader Mondelez India Foods Ltd—the maker of Cadbury’s chocolates had a 49% value share of the market in calendar year 2016, as per a December 2016 report by market research firm Euromonitor.
Euromonitor expects the market to grow at an 8% compound annual growth rate to be worth Rs16,000 crore by 2021.
Source: Mint