Hershey restructures and initiates the solo flight in the Brazilian market

A global revenue of $ 7.1 billion and about 300 million R$ in Brazil, the American chocolate manufacturer Hershey restructures its business in the country, after undo a seven-year partnership with the Brazilian 1906.
The American company has strengthened the local team and plans to invest in factory has in São Roque (SP), to accelerate the pace of expansion in the coming years. She is the fourth-largest company in the industry and wants to become the third in sales volume in the country. The goal is to triple the recipe until 2020, reaching R $ 1 billion per year.
In the world, Hershey is the fifth-largest, with 7.3 percent of the market. In front of her are Mars (14.5%), Mondelez (14.3%), Nestlé (12.4%) and Ferrero Group (9.1%), according to Euromonitor. In Brazil, behind brands Lacta (Kraft Foods), Boy and Nestlé (both of Nestlé).
"We live in 2015, a year of transition to a new phase of growth. The company now has the challenge of accelerating the pace of growth even in a scenario of consumption retracted ", said the Director-General of the Hershey in Brazil, Marcel Sacco.
The chocolate market shrank 6 percent in the first half, to 231 thousand tons, according to the Brazilian Association of Chocolates, cocoa, peanuts, hard candies and derivatives (Abicab).
But for Hershey, the operation in Brazil in the first nine months of the year grew 5.5% in revenue and 1.5% in volume. "It was a result below expectations, but still was good, whereas the market shrank 8 percent," said Sacco. Overall, the Hershey grew 1.2% in revenue from January through September, to $ 5.48 billion. Profit fell 53.5%, to $ 299.6 million, due to foreign exchange losses and a slowdown in China.
The Euromonitor estimates that the market for chocolate in Brazil will grow at an average rate of 3.2% in volume and 4.9% in revenue a year by 2020. In 2014, the industry moved R$ 12.6 billion, with sales of 320.7 million tons. The Hershey will have to grow 25% a year until 2020 to achieve your goal billionaire.
To reach this result, the Hershey took over the areas of distribution, production, marketing and sales, that were coordinated by 1906. To this end, he hired and Office people own 87 in São Paulo, opened in October. Earlier, Hershey executives were in 1906 headquarters, in Guarulhos (SP). The company has expanded the staff at 16.5%, to 613 people.
Sacco says Hershey's team began to take the sales area in October and will complete the transition in December. At the plant, the company has developed new production lines to bring the Reese's brand, a line of "waffer" covered with chocolate and other chocolate cream to compete with Nutella (Ferrero). Brookside chocolate line with exotic fruit fillings, is imported from Canada, but the plan is to have local production.
"In 2016, the company will bring to the country at least one brand new," said Sacco. Hershey also expanded the types of packaging, with smaller options to fit in the pockets of consumers. "We're not going to sacrifice margin to increase sales volume," he said. Sacco said the San Roque unit has space to receive other production lines and to a new plant. "More than that, I can't talk right now."
The acceleration plan in Brazil, according to Sacco, led Hershey to terminate the partnership with the 1906. "The plan required more investments and 1906 executives preferred not to make these investments," said the Executive. Sought, the 1906 would not comment on the matter. Investment in Brazil is kept confidential by the American manufacturer.
Sacco said the separation was amicable. "After the repurchase of part of 1906, companies continue working together. The part of merchandising is still made by 1906. In the North and Northeast, the 1906 will be maintained as master distributor of Hershey, "he said. The 1906 still will provide storage and distribution services for the American.
The Hershey arrived in the country in 1998, and operated as an importer until 2001, when it bought the plant from the Visconti in Brazil and brands such as Yo-Yo Crem and sprinkles Visconti, for $ 18 million. In 2002, the company went on to produce locally. "The company made some mistakes in the process of nationalization of the brand in Brazil and ended up opting for the partnership with the 1906 to have national presence, while devoted to innovations," said Sacco.
In January 2008, the company entered into an agreement with Pandurata Netherlands (owner of 1906) for sale and distribution of Hershey's products in Brazil.
The joint venture, the 51% stake held by Hershey and the other 49% Pandurata. The partnership was established with the objective of broadening the distribution of American brand in Brazil.