We've Stayed on the Menu of Consumers: Hershey CEO

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Oct. 1 (Bloomberg) -- Hershey CEO John P. Bilbrey discusses the company's strategy, the impact of rising cocoa prices and breaking into the Chinese market. He speaks with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Distribution.

We are available in supermarkets , drug chains, club stores, dollar stores, convenience stores.

We really are within arms reach of desire and at an accessible price point.

We call it an accessible indulgence.

In these difficult economic times since 2008, we have stayed on the menu of the consumer.

You may have had to give up some other things, but when people come to this category, we know it is not a food group, but they still want those hershey's kisses.

Had he continued being relevant in an environment where people are getting increasingly health conscious?

They want to watch their intake, diabetes is on the rise.

He comes back to what i said earlier.

We are not a food group and we know we are not.

We don't try to position ourselves as a health food.

Candy is not really a food group.

[laughter] actually, people really do come to the category and say i want to reward myself, it is indulging.

If you go back to 2008, dark chocolate was about 18% of the category.

Today it is a little above 20% of the category, so it is growing a little bit more in premium, high products.

We have an organic brand, and what might be surprising to you is we have five of the top 10 dark chocolate brands.

Those are things like york peppermint patty.

We probably have about 40% of the dark chocolate sales in the u.s., and we have benefited from the resurgence in dark chocolate.

Tell me why it is that cocoa is going up.

One kilogram of chocolate is expected to hit a record, a 45% increase since 2007. the chocolate market in the u.s. is the lowest price per pound of any market around the world.

We have a great rice per pound on chocolate versus the rest of the world.

If we were to go to china, chocolate manufacturing in china is more expensive.

China imports the materials and the market is small.

Chocolate is a great value in the u.s. how is your international business?

Hershey is largely a u.s. centered company.

You could say we are late to the game.

If you go all the way back to world war ii when a hershey bar was in every soldiers daily rations, milton hershey passed away about that time.

I have often reflected on what the management must have been thinking.

I'm pretty sure they said, i don't want to be the guy that screws this up.

The normal suspects, india, china, brazil, mexico.

We are focused on countries with high gdp growth.

If you think about developing markets and how people evolve, what happens is, first they reach for proteins because they have the ability to eat a different type of diet than they were before.

And then they reach for things they can reward themselves with and give themselves a treat.

If you take a trip around the world, the swiss eat about 12 kilos of chocolate a year.

In the u.s., we eat about six kilos of chocolate a year.

They eat that much more, and they look like pretty healthy people.

The brazilians know they're going to the beach, they eat about a kilo of chocolate a year.

When you get to china, it is just grams.

About 300 million people participate in the chocolate category in china.

The previous generation doesn't have a chocolate habit.

We are doing this in a way, we have five brands that we think of as our global brands.

It is hershey's kisses, reese's, icebreakers mints.

The ivory coast, the one of the big issues is communication.

We have a program called coco link that put cell phones in the hands of farmers.

They can call the extension agent, i can take a picture of a tree and say i think i have this disease, and they can get an answer back and go do something about it in real time.

Creating this activity is really important.

The only thing that needs to happen is they need to understand best practices.

They need to pray -- let new trees come a fertilize them property, so that they can get their crops to market at a time of the greatest need.

The benefits we have seen are really amazing.

Quick still no budget deal, but

This text has been automatically generated. It may not be 100% accurate.

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