The Hershey Company first entered India through a joint venture with the Godrej Group. How important was that partnership and what did you learn from it?
Our vision is to make The Hershey Company an innovative snacking power house. We have been in the confectionery business for over 125 years as a leader in the US and globally, and we want to continue that growth as well as our portfolio. Our international strategy is important to our overall growth, and within that, India is critically important - it is one of our key focus markets. India is one of the fastest growing economies in the world right now.
The chocolate category is $1.2 billion in revenue and is growing at 11 per cent (a year). We have been in India for about 10 years and along the way we have evolved our business model to focus on what we believe we do best - produce high-quality products. We have in particular focused on the Hersheys brand and specifically in chocolate centric categories. So, we have now become one of the leaders with our Hersheys brand in chocolate syrups, chocolate cocoa powder, milkshakes as well as spreads. Now seems the right time to take that leadership to the next level by introducing Hershey's Kisses.
Is it a conscious decision not to focus on chocolates but other chocolate-based categories in India?
We want to focus on value-added branded products. Having a presence in multiple chocolate-centric categories helps us build the brand in an even bigger way. We started with syrups, and we expanded from there. Frankly, for us, the ability to develop and produce chocolates, which needs more temperature control, was a little bit more challenging. I am proud to say that we have found a way to manufacture the product here.
How do you plan to enter the mass market?
With the launch of Hershey's Kisses, we plan to compete in at least half of the category. Hershey's Kisses is sold in over 60 countries. We make 70 million Kisses everyday. It is synonymous with sharing happiness and building connections with family and friends. That value resonates around the globe and certainly with the Indian consumers.
How challenging would it be to break into Cadbury's forte? It has an over 55 per cent market share.
It's a really big market and is growing; there is enough space for everyone to co-exist and grow and Hershey's Kisses product is unique.
India, Brazil, China and Mexico are your focus markets. How different are these markets?
Some developed markets such as the US and Canada have been around for a long time. The growth potential of emerging markets is exciting. High population growth, high growth in economies. It is a new space for us to develop our leadership position. India is particularly interesting to me because it is one of the most vibrant economies. It is a young economy and you can feel that energy when you come to the market place. It has tons of potential in terms of growth. What is different is the development versus the lack of it in some of the countries. But the good thing is that consumers across the world love treats, and have an affinity with certain brands. That is what Hershey's Kisses is all about.
To grow, it is important for FMCG companies to look beyond the US and other developed markets. Is it a little too late to look at emerging markets?
I believe in overall diversification. It is a great business strategy from a portfolio as well as geographic perspective because there is cyclicality in economies. Developed markets also grow but there is higher growth in emerging markets. The good thing for us is that when we focused on the US and North America, we didn't go into Western Europe. It is too late for us as it is a consolidated market. The growth potential in emerging markets such as China and India, in particular, is incredible. It's very important to our strategy.
When you entered India in 2010, what was the vision and how has it changed?
When you are new, it is difficult to go on your own. The Godrej partnership was a good one, helpful for us to learn and understand the market and get a good grounding. As we evolved, we learnt what was going to work for us here and what wasn't. The bigger shift was in our portfolio, to say, we as a company are all about high quality value-added, branded products that will add value to consumers. That's the kind of portfolio we do best. We need to stick to the learning we have from our big markets and transfer that to the world.
Do you plan to have your own manufacturing facilities in India?
We are excited to be manufacturing in India. We have a commitment to produce our products pretty much in every market that we serve because of our commitment to that market and also because it is the most efficient way to operate in a market. We are investing to do that and are working in partnership with a co-manufacturer. We have a world-class manufacturing facility near Bhopal where our beverages are made; we have co-manufacturers in different parts of the country. Every single Hershey's product sold in India is made in India.
When you came out of the partnership with Godrej, you had inherited a host of beverage brands such as Sofit. What is the plan for them?
Some have worked wonderfully well for us. Sofit is a great example - it's on trend, doing well in the market place. So, some of those businesses will continue to work for us. We divested some of the lower value products which didn't fit into our strategy. Our focus now is to concentrate on our lead brands, which is Hersheys. Then there are Sofit and Jolly Rancher. We also sell Nutrine, which we inherited from the joint venture, but it has a loyal set of consumers. We are ensuring that we get the products to consumers at the right price.
Aren't you too dependent on sweets, especially at a time when consumers are becoming health conscious?
It is important to have a breadth across categories. One thing I love about India is that we have more diversity in the portfolio here than in any other market. Sofit is all about better-for-you; it plays in the health space. We also have products which are more within the treat space but even within that there are actually different segments.
But won't you be looking at categories beyond chocolates, may be health-based foods?
I can quietly tell you there will be more news to come.
What kind of investments have you planned?
Significant. First of all in manufacturing. We will increase the size of our sales force capability. So, this is coming with significant investment.
How important is diversity in the workforce for The Hershey Company?
I am honoured to be the company's first female CEO and also very proud that we have predominance of women in our senior ranks. Our board of directors has nearly 50 per cent women. Our CFO is a woman, our Chief Growth Officer, too, is a woman. I believe that if people with diverse experiences are on the table, you get different perspectives that lead to best decisions and outcomes.
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