Sweet times lie ahead for Hershey's

Despite Hershey's ambitions, it has never been easy for the company to take a big bite of the highly competitive Chinese market. And Hershey has learned this better than most other foreign companies.

The company set up its office in China in 1995. But in 2004, Hershey's products were reported to be "missing" from the shelves in Chinese supermarkets, triggering speculation that the company was pulling out of the Chinese market due to poor sales.

Alfonso was quite frank about this rather painful chapter in the company's history.

"Hershey had some false starts. Much of it was due to the fact that the company was too US-centric and most of the talent base was also from the US." However, he said, there have been several improvements over the last six to seven years, and the company is now much more resilient.

"In the past, most of the Hershey chocolate bars were made in the US and then shipped to China. To be honest, that is not exactly what the customers want in China. We have altered this strategy and now make everything locally and add more local tastes and flavor for the products in China."

Hershey will continue to expand capacity in China. "Currently our facilities in China support other key markets also within the region. We are building a new facility in Malaysia so that we can free up more capacity in China to cater to the domestic market. We know that we are not yet a global company in China. But we are sure that we are more of an international company than we were 10 years ago."

Alfonso said Hershey has focused on investment-driven and brand-building geographic expansion strategy in China. "We have been very successful in terms of the 'Kisses' brand and the 'Hershey's' brand and other brands recently added to our portfolio."

The company is also looking for bigger market opportunities following the acquisition of Golden Monkey.

"The brand has been around for years now and has a strong connection with customers. While we are fully committed to maintain that brand, we are also looking to add more global brands to our portfolio."

Alfonso said he is particularly excited by the healthy snacks developed by Golden Monkey. "This is something that Hershey does not have in its global portfolio and something that is becoming increasingly popular with customers. We think there are enough opportunities for these products in other markets also," he said.