Hershey hits sweet spot in China market
Updated: 2014-11-10 16:19
By ZHANG YUWEI in New York(China Daily USA)
When J.P. Bilbrey talks about his connection to China, he describes it as a "love affair" that started in 1988, when he first visited the country.
Bilbrey, 58, is the president and CEO of Hershey Co, the largest chocolate manufacturer in North America.
"Watching the evolution of China, as a businessman, I think this is the most dynamic time for the society and the business opportunities," Bilbrey said in a telephone interview with China Daily.
"I love the Chinese culture and history; my house looks like maybe I'm from China with the antiques and things," he said. "If I could go back and be 35 years old, I would move to China."
China is not only about its history but also its future, said Bilbrey.
"So I think: 'How can I prepare my company to live in China in the future and to be there 100 years from now?' " said Bilbrey.
Hershey, based in Hershey, Pennsylvania, launched its China operation in 1995. Its Chinese market — growing at 10-12 percent annually — is the most important overseas market for the company and the second largest a7 er the United States.
Hershey now has a factory outside Shanghai. Bilbrey said the goals for the Chinese market are being reached faster than expected. "In 2015 — sooner than we thought —China is our second-largest country in the world and continues to be one of our fastestgrowing markets," Bilbrey noted, adding that Hershey will have more than $500 million in sales next year in China.
"We see China as probably the most dynamic market anywhere in the world." "We believe our business (by 2020) in China will be over $1 billion," Bilbrey said.
On Monday, Bilbrey, together with Patricia Woertz, CEO of US foodprocessing firm Archers Daniels Midland, will be honored by the National Committee on US-China Relations (NCUSCR) for their long-term eB orts and philanthropy in China to help build bilateral relations.
"To succeed as a Western company in China, you have to think of yourself as a Chinese company and you have to marry that with your Western experience as well," said Bilbrey.
Stephen Orlins, the president of the NCUSCR, said both companies care deeply about constructive US-China relations.
"In both cases, their products become more important as China's middle class (which is larger than the entire population of the US) expands, and they are offering Chinese consumers additional choices," he said. Bilbrey also lived in the Middle East, North Africa and China for about 10 years. For him, the Chinese market offers opportunities in particular to help business people create.
Despite the popularity of the company's brands, such as Hershey's Kisses, which reached annual sales of $100 million in China, the country currently has a $2 billion chocolate market compared with the $16 billion US market.
"So when you think about the size of China, people's changing eating habits, imagine that there is an opportunity [that] the market will grow," said Bilbrey.
In September, the company acquired an 80 percent stake in the Shanghai Golden Monkey Food Joint Stock Co Ltd, a privately held confectionery company based in Shanghai. The $584 million deal is a win for both, said Bilbrey.
"This also gives us access now to over 1,000 distributors all across China and into small cities — including tier two and three cities."
(China Daily USA 11/10/2014 page2)
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