Hershey to focus on top six cities, exit general trade in non metros

Mumbai: In a rare distribution shift in India's fast-moving consumer goods sector, Hershey India is pulling out of general trade in non-metro markets and focusing on the country's top six cities, breaking from rivals that continue to expand deeper into smaller towns through kirana stores.

The Pennsylvania-based confectionery maker on Wednesday told employees at a town hall that it will concentrate investments on premium urban consumers, prioritising modern trade, quick commerce, e-commerce and general trade in the largest metros while revamping its distribution network across select traditional trade markets to drive profitable growth.

Rather than seeking presence in every town, the company is betting that India's largest cities and rapidly expanding digital commerce ecosystem will generate stronger returns as consumers increasingly spend on premium chocolates and packaged food, according to a person familiar with the development.

India is among Hershey's most important growth markets globally, supported by rising premium consumption, rapid urbanisation, increasing digital adoption and the expansion of omni-channel retail, the company said. Sales of its chocolate bars and quick commerce business have doubled, while syrups, spreads and baking products continue to post strong double-digit growth.

"Our brands are well positioned to benefit from the evolution of the Indian consumer," said Rahul Jain, general manager of Hershey India, confirming the move. "We are strengthening our presence in high-potential channels and refining our distribution model to focus on select general trade markets. Our India strategy is centred on top metro general trade markets and a strong omni-channel presence, where we have the strongest right to win and can best serve our consumers."

The strategic reset comes as Hershey seeks to improve the economics of its India business. Revenue was largely unchanged at ₹525.2 crore in the year ended March 2025 from ₹526.7 crore a year earlier, while its net loss narrowed to ₹68.6 crore from ₹82.6 crore, according to regulatory filings.

The strategy stands in contrast with most consumer goods companies, including Hindustan Unilever, ITC, Mondelez and Nestle India, which continue to widen their distribution into smaller towns and villages despite the rapid rise of online retail. General trade still accounts for over three-quarter of FMCG sales in India, but premium categories are increasingly being driven by affluent urban shoppers using modern retail, quick commerce and e-commerce platforms.

India's chocolate and confectionery market is estimated at about ₹25,000 crore, split almost equally between chocolates and sugar confectionery. Annual per-capita chocolate consumption is around 200 grams, compared with more than 10 kg in the UK, highlighting the significant headroom for long-term growth as disposable incomes rise and consumers shift towards premium products.

Founded in 1894 by Milton Hershey, The Hershey Company is one of the world's largest snacking companies, generating more than $11.7 billion in annual revenue from operations across about 65 countries.