China's growing urban population could lead to a surge in chocolate consumption in the country. A senior Hershey officer predicted that chocolate sales can be expected to grow nearly 60 percent by 2019.
The Hershey officer announced that the huge figure of $2.7 billion chocolate sales of 2014 may increase more than two-fold by 2019, reaching as high as $4.3 billion in sales.
Hershey International president Bert Alfonso has the habit of making positive bets on growing emerging market consumption, even though the statistics showed that there is a stagnant demand for chocolate on rapidly growing Asian markets. Still, Alfonso is sure that the company would benefit from a "demand boom" for chocolates.
In China, Alfonso expects that Hershey's chocolates would reach sales 35 percent higher than the previous year. He also expects the company would be able to achieve chocolate sales of $450 million in 2015.
Last year, chocolate sales in China were 4.5 percent of the company's total revenue. The growth could be explained by Hershey's integration of products from Chinese candymaker Shanghai Golden Monkey Food Co. Hershey acquired the company back in Dec. 2013.
Alfonso is ever optimistic with what 2015 could bring. He said:
"Consumers are embracing our brands in China as we outpace category growth. We are excited about the potential for Shanghai Golden Monkey."
Apart from Hershey, other major chocolate companies like Cargill and Olam are also expecting huge demand in Asia. The two companies plan to expand bean processing operations in Asia, prompting concerns that the market would be exposed to the risk of overcapacity.