Hershey’s targets Cadbury with Kisses

MUMBAI: Hershey’s Kisses, the iconic chocolate brand from The Hershey Company, has kept its date with India, coinciding with the festive season, which lifts sales of chocolates — an impulse product — in a big way.

The uniquely shaped chocolate will compete with established players like Mondelez India Foods, which is present in the premium end of the market with brand Cadbury Silk. Mondelez, too, is gearing up for the festive season and is giving Silk a new purple and gold packaging to accentuate its premium look. Cadbury, which is a market leader with a share of around 66% in the Rs 8,500-crore chocolate market, will be a formidable competitor, but Hershey’s is banking on its global goodwill and recall among consumers to make it big in India.

In an exclusive interview with TOI, The Hershey Company president & CEO Michele Buck said big investments will be made in advertising, marketing and promotion, as part of the company’s plan to invest $50 million in India. Buck believes the Hershey equity and the points of differentiation about Kisses will help the product in its launch in the metros.

“India, with its growing middle class and disposable incomes, is a vibrant market. We are delivering strong performance here with our focused brands growing nearly 50% this year. We are more focused on the metropolitan markets, particularly with the Hershey’s Kisses launch, and playing a bit more on the premium side of the market place. We think it’s a good place to start in the market right now,” said Buck.

The Indian chocolate market, which reported a negative growth in 2015, returned to double-digit growth levels last year. The main drivers of the category are Rs-5 and Rs-10 price points, even though consumption of premium chocolates as a trend is picking up among a section of metro-centric consumers. Kisses is priced at a slight premium to Silk. While a 36gm pack of Kisses will be available at Rs 50, a 60gm bar of Silk is priced at Rs 65. Brands like Ferrero Rocher and Toblerone operate at a higher price point than this.

Over the course of the last few years, Hershey India has almost entirely localised its manufacturing. Hershey’s Kisses, which is first being rolled out in South India (onethird of the national chocolate market), is being produced at its facility in Gujarat.

India, said Buck, is one of the fastest growing markets for The Hershey Company. India is a part of the cluster of emerging markets outside of North America, which contributes 12% of the company’s turnover. “I can say that despite this segment being 12% of our total business, it’s contributing higher than that relative to our growth. I expect that trend to continue,” said Buck.

On the consumer shift towards healthier alternatives, which has forced global soft drinks companies to alter their portfolios, Buck has a different take. “They continue to have various occasions where they want to treat themselves with indulgences, and other times when they are looking for other type of benefit foods. Our growth strategy is to have more consumer snacking occasions by offering different products that fit those needs. That’s why we are diversifying our portfolio,” said Buck.

The development was reported by retail.economictimes.indiatimes.com

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