China candy unit quietly sold by Hershey
In addition, several Hershey executives, including international president Steven Schiller, have left the board of Golden Monkey, a Shanghai-based maker of toffees, mints and cakes. Schiller, who was the legal representative of the Chinese brand, has been replaced by Zhang Jianfeng, head of the new owner's parent company, according to the company's registration statement updated on Friday with the State Administration for Industry and Commerce.To get more news about
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"As part of our renewed strategy to grow our business by focusing on Hershey's private label chocolate, we have decided to sell the Golden Monkey business," the company said in an emailed response to Caixin, without disclosing the value of the deal.
Golden Monkey sold an 80% stake to Hershey in 2014, and Hershey bought the remaining 20% in the following years. The total deal was worth 3.5 billion yuan ($515 million), according to a Hershey statement four years ago.
The "marriage" between the American chocolate maker and the Chinese candy maker was intended to help Hershey expand into smaller Chinese cities where Golden Monkey had a strong presence, at a time when Hershey was only popular in large first- and second-tier cities, said Zhu Danpeng, a food and beverage industry analyst with the China Brand Research Institute.
But the sugar confectionery market in China peaked in 2014 and began to decline. According to market research firm Mintel, sugar confectionery sales in China fell from 70.7 billion yuan in 2014 to 67.1 billion yuan in 2016, although they rebounded slightly to 67.3 billion yuan last year.
"The sugar confectionery market has finally regained resilience in terms of retail value, but volume sales are still declining as more health-conscious consumers cut back or switch to alternative products or other snacks," said Cici Wu, research analyst at Mintel.
What's more, the management teams of Hershey and Golden Monkey didn't get along well, disagreeing on operating principles and working styles, Zhu said.
As a result, Golden Monkey's market share suffered, falling from 1.4% of total confectionery sales in 2014, making it the ninth-largest sugar confectionery brand, to just 1% two years later, dropping it to 11th place, according to market research firm Euromonitor International.
Hershey began laying off Golden Monkey employees in 2015, according to Chinese media reports. Rumours that Hershey was considering selling the Chinese brand surfaced last summer, but the American company told Caixin at the time that the information was "untrue" and "unfounded".
China candy unit quietly sold by Hershey
