Hershey looks to set up own manufacturing unit in India

The Hershey Company’s new chief executive and president David Westis extremely optimistic about the Indian market. India is the second market, after Mexico, he has visited since October last year, when he took over as the president of the company. While China is the next on his agenda, West has some ambitious plans for India. He plans to bring a number of products from Hershey’s portfolio to India along with setting up an independent manufacuring unit. In an interview with Mint, West said he has come to India to get a first hand experience of the market, which is quite unique.Edited excerpts:mobAds

add_main_image What is bigger in the Indian market, challenges or opportunities?

Clearly the opportunity is large. It has a great market and a growing economy. Consumers have an affinity for confectionery and the chocolates category is growing, as is the sugar confectionery. Obviously, there are challenges when we enter new market but the opportunities far outweigh the challenges.

By when do you plan to roll out your other products in India?thirdMAds

The joint venture is about six months old. We are largely on track with what we expected to do. We have our milk mix-modifying product, as syrup in the market place and milkman ice cream toppings will come this year. We have done some significant work in the confectionary portfolio with Super Maha Lacto. Depending on the type of the product we will be launching, each one will be focused and targeted at specific consumer either, need based or age group. Beyond that, we cannot talk about future launches for competitive reasons.

Will you customize Hershey’s products to suit Indian consumers’ taste and budget?

We have taken the syrup from the Hershey’s US portfolio was fortified, which was very important for the Indian consumers. We had also adjusted the taste of the syrup suitable for the Indian palette. As we introduce more products, we are going to modify those products specifically for Indian consumers for sure, in terms of both taste and pricing. fifthMAds

What is the purpose of your visit?

For me, mostly I make sure that I understand the market, the Indian consumers and the retail environment. I also wanted to make sure I spend some time with our partner, the Godrej team. With that, we hope to deliver a product line that over time meets some of the unmet needs of the Indian consumers.

Which is the bigger market for Hershey’s - India or China?seventhMAds

We are present in China where we have a manufacturing joint venture with Lotte but we have our own distribution and marketing in some of the key cities. Both market are very promising but obviously having the joint venture with Godrej in India gives us a little bit of a jumpstart versus where our business is in China. We feel excited about both markets and from demand stand point both consumers have an affinity for chocolates in particular and both are big size markets.

Do you plan to sell your products primarily in the cities or you will go to rural India as well with lower priced products?

We hope to get our distribution to the broadest extent that we can. To get both distribution as well as consumer acceptance, we have to offer a price value equation that works for consumers. That means that consumers getting a good product at a price they think are reasonable for that product.

Will your manufacturing unit in India be an outsourcing hub for nearby countries after few years?

At this point, the unit will be used for local production and market. As we continue to grow our business in Asia, we look at our geographic footprint and our manufacturing and distribution footprint in the region and make the most economic decision.