Going for bronze: Hershey eyes third spot in Brazil’s chocolate market by 2020
It’s new five-year plan for the Brazilian market is part of the company’s renewed focus on Brazil as a strategic market in which the company aims to triple its operations and offer innovative products to consumers.
Following the dissolution of its Brazilian joint venture with panettone maker Bauducco, Hershey told ConfectioneryNews it will go it alone with the aim of becoming the third largest manufacturer in the Brazilian market with annual sales topping BRL 1 bn ($261m) from 2020.
The company’s planned growth is based on expanding Hershey’s product distribution, new product launches, brand strengthening, improvement of sale point performance and growing local production capacity.
Marcel Sacco, director general of Hershey’s operation in Brazil, said that 2015 is a transition and transformation year for the company. Following the recent end of the joint venture with Bauducco, Hershey opened a new office in São Paulo, hired more than 60 new collaborators and it now employs around 600 staff in its São Roque production plant and São Paulo HQ.
Brazilian competition authorities approved a deal for Hershey to purchase the remaining 47% of its joint venture with Bauducco in August, which opened the way for Hershey’s new era in the Brazilian market.
During this quarter, Hershey will gradually assume commercial command over the joint venture and in order to achieve this, the US giant has invested in a new 100% Hershey sales team that will be active across the entire territory of Brazil.
Nevertheless, the partnership with Bauducco will remain alive. “We have in Bauducco a successful partner that has been a reference point in the country for the past eight years that we were together,” said Sacco. Brazil’s food giant Bauducco will remain responsible for merchandising Hershey’s brand in Brazil, in addition to its continued role as a distributor of Hershey products in north and northeast Brazil.
Hershey is also hoping to grow through innovation. This year alone, Hershey’s launched: (i) Choco’n Biscuit bar, a milk chocolate with biscuit product created in partnership with Bauducco, (ii) Reese’s Sticks, wafers filled with peanut butter and covered in milk chocolate, and (iii) Brookside snacks, made of dark chocolate with real exotic fruit filling.
“Hershey’s Creamy was the first pure chocolate cream in the market, carrying the Hershey’s brand for new consumption occasions,” said Sacco on the most important launch of the year.
Hershey’s solo strategy in Brazil began after it repurchased the 47% stake that Bauducco held in Hershey’s outfit in Brazil. To mark this moment, the company embarked on an internal communication campaign with the “100% Hershey” motto to mark the company’s fourth stage in the country.
The previous three stages of Hershey’s presence in the Brazilian market include the company’s arrival in the country in 1998, when its business model consisted of direct product imports from the US for distribution in Brazil. The second stage ensued when Hershey became a national player, between 2001 and 2007, following the purchase of Visconti. Finally, in 2008, the partnership with Bauducco helped to start consolidating the Hershey brand in Brazil and it is now present across the entire country and in all distribution channels.