Business Standard: November 06, 2017
New Delhi: Global chocolate major Hershey is considering turning India into an export hub.
The company, which has recently urged Prime Minister Narendra Modi to ease export-import norms, plans to use the huge market as a testing ground for its newer products. India can be turned into an incubation hub for Hershey products once barriers are removed, said Steven Schiller, president international, Hershey global.
“During the round table meeting with Prime Minister Narendra Modi, I mentioned about two areas that requires focus. And they are about simplifying import and export barriers and tariffs here. India is a huge market and we want to build infrastructure here. But that’s a very expensive proposition. Despite the fact, that India has potential to be turned into an export hub. Also, we would like to bring our global products here and test them and then take them to other markets,” he said.
Hershey, which has committed ~320 crore of investment over the next five years in the country, is also looking at bringing in new brands here. The majority of its investments would be channelised towards building its existing and new brands.
The company, makers of chocolate syrups and Jumpin mango juices, plans to export all products such as soyabean milk, spreads and Jolly Rancher lollypops that it currently markets in the country to markets in West Asia, where significant number of Indian diaspora reside.
Lack of scalable quantity is a major hindrance in doing so, Schiller said. Once the regulatory norms are in favour, however, the company can begin exports “fairly quickly”, he said. “It’s a great opportunity. We would like to export at least half a dozen items from here, which will also optimise transport cost,” he said. “But (for that) we would like to have a zero duty trade kind of environment.”
To utilise the diverse market and consumer insights that can be gathered from the country, Hershey also envisages to use India as an incubation and development hub for new products. According to Schiller, the company can bring innovative products here and then test them in the market and do further research, before taking them to other markets.
“I think India can be a good incubation hub. In fact, we had been discussing this very recently. Some of our products that received less success outside, have been very successful here. So we replicating that model in other markets makes sense. We have got good R&D and manufacturing capabilities here and solid marketing talent, as well. We should be able to learn here and take that knowledge. But today it is insulated,” he said.
Of late, Hershey’s business in India has witnessed rapid growth. While in 2016 it posted 40 per cent growth, during the last quarter, its business grew by 16 per cent.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.