Hershey to Launch Innovative Lancaster Brand in China

22 May 2013 --- The Hershey Company announced it is launching an innovative new candy brand in China called “Lancaster.” The new products will initially launch in three cities – Wuhan, Hangzhou and Chengdu – in June, followed by a wider distribution in 2014.

The new brand marks a significant first for The Hershey Company: it’s the first time the company has launched a completely new brand outside the United States in its nearly 120-year history. It is also the company’s first new brand that is not a brand extension or acquisition in the past 30 years.

Lancaster brand candies are carefully crafted through a proprietary Nai Bei candy-making process that requires high-quality imported milk and slow cooking. This process creates a rich, creamy flavor that represents a new candy experience for consumers in China. Lancaster products will compete with traditional candies in China’s “milk candy” confection category that account for one quarter of the total candy market in China and about 7.5 billion RMB, or USD$1.2 billion. The Lancaster brand’s unique taste will contribute to the evolution of the premium milk candy segment which is currently showing the strongest growth in the entire category.

“Consumers in China love high-quality, delicious candy that reflects care and craftsmanship and gives them a rich taste experience that is distinct and premium,” said Jane Xu, Vice President and General Manager of Greater China for The Hershey Company. “Lancaster Nai Bei candy provides consumers with a milk candy experience that is unlike any other product available in the China market.”

Lancaster is the latest example of The Hershey Company’s focus on innovation to drive continued strong growth in China. The new product was created in the company’s innovation labs and performed extremely well in consumer testing.

“Lancaster was carefully developed with the consumer experience in mind. We believe that quality ingredients and craftsmanship are what make Lancaster extraordinary and making something extraordinary takes time,” added Xu.

The three specially crafted flavors – Original Pure Nai Bei, Pure Nai Bei filled with Rich Nai Bei, and Pure Nai Bei filled with Strawberry – will be available in three sizes: a 40-gram bag for a suggested retail price of 6 RMB; a 108-gram bag for a suggested retail price of 12.9 RMB; and a 228-gram bag for a suggested retail price of 24.9 RMB.

China is a priority market and growth engine for Hershey globally. China plays a critical role in the company’s long-range growth vision which includes reaching $10 billion in worldwide net sales by 2017. Hershey has substantially strengthened its brands’ in-store presence in China during the past five years and its products are becoming closely associated with key gifting occasions, including holidays, weddings, Chinese New Year and Chinese Valentine’s day.

“It’s significant that Hershey chose to launch its first new brand in three decades here in China,” said Steven Schiller, Senior Vice President of the Global Sweets & Refreshment business unit for Hershey. “This demonstrates the company’s deep commitment to China, as well as the importance of this market in Hershey’s global growth plans.”

While innovative with a distinctive taste, the Lancaster brand is rooted in Hershey’s heritage. The product was inspired by similar candies that company founder Milton Hershey once made more than 120 years ago in his original candy company located in Lancaster, Pennsylvania, USA. He began making these milk candies almost a decade before he started his chocolate company. The success of Mr. Hershey’s original Lancaster candy business allowed him to launch his now-famous chocolate business. The new Lancaster brand in China marks a return to the products that started it all.