China boasts a huge consumption market, of which chocolate and snacks take up only $2.7 billion.
Looking at the industry as a whole, Chinese consumers' demand for chocolate is still growing and was not prevalent in previous generations in China.
To put this in perspective, in China, consumption per capita lies just below a dozen grams.
Around the world consumption is many kilos per year, indicating there is still room for significant growth for chocolate in China.
This is also why we are investing in growing the chocolate category ranging from our ongoing chocolate portfolio brand-building as well as strategic promotions like our recent support for the Shanghai Chocolate Festival.
Could you tell us a little about your innovation center in Shanghai?
The two-floor, 22,000-square-foot facility is a significant investment in the China market for Hershey.
It houses R&D laboratories, a pilot plant for the chocolate and sweets& refreshment categories, and a development center for emerging product offerings.
It also features a sensory area, creativity center, packaging development section and research laboratory.
The center also serves as a broader global innovation hub with a focus on building powerful brands in China, across Asia and worldwide.
To achieve this goal, we are putting particular emphasis on consumer research and testing－a process Hershey calls consumer-centric brand building.
By placing the consumer at the center of all of our innovation work, we are able to gain a holistic understanding of how the company's products play into the lifestyles and changing consumer needs in China and across Asia.
Does Hershey intend to increase its hiring in China?
The number of employees we have in China is determined by the strength of our business and our short-and long-term objectives.
We are proud of the local talent in our business in China and in our Asia Innovation Center. We believe that to understand consumer and marketplace needs, we need to find the best local talent who deeply understand the issues and environment of the local market and can help chart a path to success.
We also need people who have a strong understanding of the unique aspects of the supply chain and the retail marketplace in China.
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