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Home / China-US economic relations

Hershey sees sweet spot amid slowdown

By Li Xiang (China Daily)

Updated: 2015-09-25 07:39:02

Hershey sees sweet spot amid slowdown

John P. Bilbrey, president and chief executive of United States chocolate giant the Hershey Company. [Photo provided to China Daily]

China remains chocolate giant's top priority market despite a slowing economy, says its chief

Long-term opportunities are what John P. Bilbrey, president and chief executive of United States chocolate giant the Hershey Company sees in China despite the headwinds in an evolving, yet promising market.

Bilbrey said that Hershey is betting on more strategic investments in innovation and brand building to gain greater shares in China and to get its business back on the growth track.

Hershey sees sweet spot amid slowdown

The company saw its operating loss in international markets widen to $44.5 million in the second quarter of this year mainly due to the slower sales in China.

Bilbrey remained upbeat about China, noting that Hershey will focus on its core chocolate business which will continue to grow for the full year, although at a slower pace than previous years.

The CEO also defended the company's $584 million acquisition of Shanghai Golden Monkey in 2013, saying that the integration of the Chinese food company will bring Hershey the complementary advantages through its extensive distribution networks and expanded candy and snack portfolios in China.

Bilbrey spoke to China Daily on Hershey's strategy for business growth and various other aspects. Following are the edited excerpts from the interview:

How has a slowing Chinese economy affected Hershey's business in China?

Hershey's chocolate business has been impacted by this slowdown. But our business is still growing, albeit at a smaller pace and growth rate.

This year, the growth rate in the overall chocolate category has improved despite experiencing a much tougher selling environment.

Even with some of these headwinds, we expect the category to recover strongly in the second half of the year, so that we can have a full-year growth rate of 8-9 percent in the category.

China remains our top priority market and we will continue to take the needed steps to get our business on track including strategic investments in innovation and brand building as we look to gain market share.

The company's operating loss has widened in the international markets due to the slower sales in China. What do you think went wrong?

It is not unusual to experience the cyclical nature of economies.

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