February 19, 2015
Chocolate sales in China are forecast to increase 60% – from $2.7 billion in 2014 to $4.3 billion in 2019 according to Hershey International president, Bert Alfonso.
Mr. Alfonso goes on to forecast that Hershey’s sales in China will outpace category growth, increasing by 35% to $450 million in 2015, indicating that chocolate sales in China will account for 4.5% of Hershey’s $7.4 billion of revenue in 2014.
The significant growth projections are expected to be the result of Hershey integrating products from its December 2013 acquisition of Chinese candy maker, Shanghai Golden Monkey Food Co.
Cocoa consumption growth historically follows gross domestic product (GDP) in emerging markets, but these bullish projections come as Asian cocoa grinding rates, which are often used as an indication of demand, have in the fourth quarter of 2014, fallen to their lowest level in 21 months.
This decrease in demand could be a market reaction after large multinationals including Cargill and Olam have recently expanded their capacity and processing operations in the region in expectation of growing demand, possibly flooding the market to an extent.
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