This article is from WeChat official account:Beijing Commercial Daily (ID: BBT_JLHD) , author: Qian Yu, Wang, editor: Hu, the original title: “the sudden departure of general manager of Greater China, What can save it Hershey “Candy Empire”, head picture from: Visual China

In less than a week after the announcement of the channel reform in the Chinese market, the general manager of Hershey Greater China suddenly resigned. On December 1, a reporter from Beijing Business Daily learned from the relevant person in charge of Hershey that Hu Tingzhou, the current general manager of Hershey for Greater China, officially resigned, and the Chinese team will be temporarily led by two directors. It is worth mentioning that just four days ago, Hu Tingzhou also announced that Hershey would cooperate with a large local distributor to adjust its sales channels in China.

In the eyes of industry insiders, drastic reform of channels is Hershey’s response to the crisis in the candy industry, but the sudden departure of the “top leader” in the Chinese market will increase uncertainty for Hershey’s development in the Chinese market. Sex.

(Picture source: Hershey official website)

1. The general manager of Greater China resigns

On December 1, the relevant person in charge of Hershey told a reporter from Beijing Business Daily that Hershey is currently in the Greater China RegionGeneral Manager Hu Tingzhou officially leaves Hershey. The Hershey China team will be led by Sales Director Tian Lei and Finance Director Chen Yanling. During the transition period, Tian Lei and Chen Yanling will report to William Pritchett, Vice President of Strategy at Hershey.

In fact, it has only been one and a half years since Hu Tingzhou took over the business in Greater China. Public information shows that Hu Tingzhou joined Hershey in July 2017 as the senior sales director of Greater China, responsible for managing the sales department of Hershey. Before joining Hershey, Hu Tingzhou served as the senior director of Pepsi Foods China’s key account department, and has led modern channel development, market research, customer marketing and revenue management teams. Then in December 2016, he joined the local beauty brand Xiangyi Bencao as the vice president of sales, but left less than a year later.

On June 1, 2019, because the former general manager of Greater China Rohit Grover was appointed as President of Hershey International Business, Hu Tingzhou succeeded Rohit Grover as general manager of Greater China.

As for the reason for Hu Tingzhou’s resignation, the relevant person in charge of Hershey China told the reporter of Beijing Business Daily that it was because of his personal professional development needs. After Hu Tingzhou resigned, there were rumors that “Hu Tingzhou is about to join a well-known domestic insurance company.” The relevant person in charge of Hershey did not give a positive response to this statement, only saying, “I believe that any team that has the opportunity to work with this outstanding executive team Or the company will feel lucky.”

China food industry analyst Zhu Danpeng believes that Without choosing a good successor, the general manager of Hershey’s Greater China region suddenly resigned, which is relatively hasty, especially near the Spring Festival. He is good at gift sales. For Hershey’s confectionery companies, the consumption of year-end and festive gifts accounts for almost 50% of the whole year, which will have a great impact on Hershey’s overall performance this year and future mid- and long-term strategies.

2. Cooperate with local distributors

It is worth mentioning that just four days ago, Hu Tingzhou was still planning the channel changes in China. According to Hu Tingzhou, Hershey will work with a large local distributor to make corresponding adjustments and optimizations to China’s sales channels and service methods.

The relevant person in charge of Hershey told the Beijing Business Daily that the cooperation between Hershey and strategic distributors is channel authorization. Specifically, The Hershey China operations team will continue to lead the strategy formulation, market and brand strategy, new product development, production and supply, management of core customers and strategic distributors in China, its distributor partners Will be responsible for accessSales and services, as well as product import, logistics and distribution services in the Chinese mainland market.

As for the reasons for cooperating with local distributors, the relevant person in charge of Hershey said in an interview with a reporter from Beijing Business Daily, “Hershey always evaluates the operating efficiency of major markets on a global scale and now decides to optimize sales in China Channel mode, through establishing a solid partnership with strategic distributors with successful business and good reputation, and building a supply chain system to jointly promote Hershey’s strong and sustainable business model in China. This strategy is only for Hershey’s The adjustment of the sales channel model in the Chinese market will not affect its overall operation plan and development strategy.”

For this channel change, Hu Tingzhou concluded: “This is a correct and difficult decision.”

Shen Meng, director of Chanson Capital, believes that streamlining local distributors and reducing the management cost of distribution channels is undoubtedly a correct decision from a corporate perspective. However, the process of replacing long-term cooperative small and medium dealers with a few large dealers will be more difficult.

In fact, Hershey will also adjust the Chinese team at the same time as the channel changes. Hu Tingzhou said that the change in business model will have a corresponding impact on the development of Hershey’s employees. A reporter from Beijing Business Daily learned that Hershey China has issued notices to some employees to adjust their labor contracts.

This move also triggered speculation by industry insiders: “Hershey may fade out of the Chinese market.” In response, the relevant person in charge of Hershey responded, “China is one of Hershey’s important markets, and Hershey China will still maintain The operating team and operating organization will continue their long-term development strategy in the Chinese market unwaveringly.”

3. Breakthrough in the candy industry

In the eyes of industry insiders, Hershey’s series of changes are mainly due to the overall decline of the confectionery industry in which the top leaders in Greater China resigned and adjusted channels to streamline distributors.

According to Hershey’s official information, Hershey is one of the world’s leading chocolate and delicious snack companies, providing chocolates, candies, mints and other delicious snack foods. The company owns more than 80 well-known chocolate and confectionery brands (including HERSHEY’S Hershey Milk Chocolate, REESE’S Milk Chocolate Peanut Butter Cup, HERSHEY’S KISSES Hershey Kiss Chocolate, JOLLY RANCHER Storm Fruit Fruit Flavor Candy, ICE BREAKERSChewing gum and BROOKSIDE Bei Ke poetry fruit soft heart dark chocolate candy etc.).

However, since the WHO released the “25g daily sugar intake” dietary guidelines in March 2015, sugar reduction has become the biggest storm sweeping the global food industry. At that time, several confectionery companies, including Nestlé, Ferrero, Lindt and Mars, jointly promised that “at least half of the products sold in the next five years will have a single package of calories within 200 calories.”

According to data from research institutions, from 2016 to the present, the overall size of the candy market has slowly increased from 88 billion yuan to 96.6 billion yuan.(estimated), the average annual growth rate is only 2%. Compared with other categories that also belong to the field of snack food, the growth rate is the lowest. In the same period, the growth rate of household consumption expenditure was as high as 7.1%~8.6%(National Bureau of Statistics data).

In the eyes of industry insiders, if the market growth rate of a category lags far behind the growth rate of residents’ consumption, it reflects the change in consumption concepts and the decline of this category.

Affected by the industry, Hershey’s market share in China is gradually shrinking. According to Mintel data, from 2015 to 2018, Hershey’s share of China’s chocolate retail market dropped from 8.5% to 5.1%.

In fact, in response to the crisis in the candy industry, Hershey has focused on implementing the “Three Strategies” in recent years, that is, while vigorously developing e-commerce channels, focusing on the chocolate category and continuing to innovate to meet the needs of the Chinese market. In July 2019, Hershey China also announced the signing of Huang Zitao as its brand spokesperson. In the same year, Hershey biscuits and other bakery products were launched one after another. Hershey mooncakes also added new flavors based on the previous year’s big sales; , Hershey also opened a number of offline dessert concept stores.

In the opinion of Xu Xiongjun, a strategic positioning expert and founder of Jiude positioning consulting company, Hershey has encountered a bottleneck in the growth of the Chinese market. In the future, in terms of products, Hershey should cater to the general health trend and develop a new generation of healthier products; in terms of positioning, it will compete with competitors such as Mars, Nestlé and other food companies; in consumption scenarios On the one hand, it is necessary to accelerate online and offline integration to realize the diversified development of consumption scenarios.

This article is from WeChat official account: Beijing Daily (ID: BBT_JLHD) , author: Qian Yu, Wang, editor: Hu