Hershey is to launch its first confectionery brand outside the US in its history with the roll out of Lancaster milk candies in China.
The US confectioner, which has predicted China will be its second-largest market in five years, will launch the brand in three cities next month.
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Lancaster will compete in the milk candy segment of China’s candy sector. Hershey said milk candy sales are worth around CNY7.5bn a year and account for a quarter of China’s candy market.
Jane Xu, vice president and general manager for Hershey’s operations in Greater China, insisted Lancaster “provides consumers with a milk candy experience that is unlike any other product available in the China market”.
The brand, Hershey’s first new line that is not an extension or acquisition for 30 years, will be sold in Wuhan, Hangzhou and Chengdu. Three flavours will be on sale in three different pack sizes.
Hershey said the Lancaster candies were “inspired” by products founder Milton Hershey made at his first candy company in the town of Lancaster in Pennsylvania over 120 years ago.
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By GlobalDataIn February, at the Consumer Analyst Group of Europe conference in London, Hershey CEO J. P. Bilbrey described China as a “win now” market for the company.
He said Hershey was “placing a big bet” on China and was looking to launch more products in the country after seeing success with its Kisses brand in the country. It is building its distribution in China and opened an innovation centre in the country last autumn.
Last month, when Hershey appointed CFO Bert Alfonso to a new role in charge of the company’s international operations, Bilbrey revealed sales in China had increased at a “soild double-digit rate” in the first quarter of 2013.
Bilbrey said Hershey would continue to invest in its sales organisation and in brand development in China.
“We’re not necessarily saying, ‘We’re going to go be number one by a specific date.’ That could be a really costly and foolish thing for us to do. We want each of these [emerging] markets to be successful for us. We want them to be rewarding for our shareholders, and therefore, we have a pretty planned approach.”
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