Emerging markets

Hershey goes solo in ‘key’ Brazilian market after acquiring Bauducco’s JV stake

18-Aug-2015 - Last updated on 19-Aug-2015 at 12:11 GMT

Brazilian chocolate retail value sales set to grow 6% per year up to 2019

Hershey has received clearance to acquire the remaining 49% in its joint venture with Bauducco, allowing the US giant to grow in the emerging market as its own entity.

Brazilian competition authorities approved a deal for Hershey to purchase Bauducco’s stake for an undisclosed sum on Monday. Hershey entered the JV with Bauducco’s subsidiary Pandurata Alimentos, a leading firm in Brazilian bakery, in 2008.

Jeff Beckman, head of corporate communications at Hershey, told ConfectioneryNews: “Brazil is a key focus market for Hershey and acquiring the remaining interest in the JV gives us greater control to continue growing our brands there and reflects our commitment to this key market.”

China, Mexico and Brazil were earmarked as Hershey standout markets by CEO John P. Blibrey in the firm’s Q2 2013 earnings.

Brazil’s growing chocolate market

The Brazilian chocolate market recorded retail value sales of R$12.6bn ($3.6bn) in 2014 and is to register a compound annual growth rate (CAGR) of 6% to reach R$17 billion ($4.9bn) by 2019, according to Euromonitor International.

Mondelēz leads the Brazilian chocolate confectionery market with a value share of 32% in 2014, Euromonitor data shows.

Hershey sells products in Brazil under its Hershey Reese’s, IO-IO and Visconti brand names.

“An example of popular products in Brazil include our giant tablet chocolate bars and Hershey’s Mais, a chocolate-enrobed wafer bar,” said Beckman of Hershey.

Hershey introduced its Reese’s brand to the Brazilian market in May last year. The company started imported products to Brazil from the US in 1998.

Hershey acquired Bauducco’s Visconti factory in 2001 and brands Io-Io Crem and Visconti Sprinkles.