Hershey to acquire Chinese confectionery company
Dec. 19, 2013
by Eric Schroeder
HERSHEY, PA. — Hershey Netherlands B.V., a wholly-owned subsidiary of The Hershey Co., has signed an agreement to acquire 80% of Shanghai Golden Monkey Food Joint Stock Co., Ltd. (SGM), a privately held confectionery company based in Shanghai, China. The transaction is the latest in a series of investments Hershey has made in China in recent years. In May, the company opened its Asia Innovation Center in Shanghai.
Founded in 1996, Shanghai Golden Monkey manufactures, markets and distributes Golden Monkey branded products in five cities. The company has more than 130 sales offices, approximately 1,700 sales representatives and about 2,000 distributors covering all regions and trade channels in China. The company’s portfolio includes Golden Monkey candy, chocolates, protein-based products and snack foods.
Approximately 75% of the company’s net sales are within the non-chocolate and chocolate candy segments. The remainder of sales are concentrated in the fast-growing protein-based bean products and other snack categories. Overall, Shanghai Golden Monkey’s net sales have been growing double digits, on a percentage basis, and the company is expected to generate net sales of more than $225 million in 2013.
“The agreement between Hershey and Shanghai Golden Monkey is a win for both companies,” said John P. Bilbrey, president and chief executive officer of The Hershey Co. “The strength of SGM’s confectionery portfolio and overall distribution capabilities, especially within the traditional trade, is an opportunity for us to leverage scale to make the iconic brands of Hershey and SGM even more powerful. Additionally, SGM’s focus on protein-based products and snacking is on-trend with Hershey’s consumer-centric marketplace insights.”
Zhao Qisan, founder, chairman and general manager of Shanghai Golden Monkey, said, “In less than 25 years, SGM products have become national, well-known, trusted brands in China. Hershey and SGM have similar cultures and strategies related to brand building and selling capabilities, and we’re pleased that a company of Hershey’s stature sees the potential in our great company. We look forward to working with Hershey and leveraging the resources that both of us have to offer to the great benefit of Chinese consumers who will have even more choices for high-quality products after this transaction.”
Humberto P. Alfonso, president of Hershey International, said Shanghai Golden Monkey fits the mold of companies Hershey is looking to acquire.
“It is located in our primary international market, China. It is a pure play confectionery and snacks company, and it has distribution into channels where Hershey products have yet to penetrate,” Mr. Alfonso said. “Additionally, the company has a strong history of innovation and product quality as evidenced by the outstanding reputation of its core brand, Golden Monkey, which has been nationally recognized as one of China’s most iconic brands.”