While there is widespread speculation about the five-year joint venture between Godrej and Hershey coming to an end, there are now even fewer chances of any of the iconic Hershey brands coming into the Indian market soon.

With just a single product, Hershey Syrup, launched by the joint venture nearly two years ago, unleashing the rest of the Hershey iconic portfolio with brands such as Reese's, Kisses, Special Dark and Ice Breakers, is not going to be imminent.

Speaking to Business Line , Mr A. Mahendran, Director, Godrej Hershey, said, “Hershey Syrup was launched two years ago and we will bring in the Hershey brands only if deemed fit depending on the market conditions.”

Though the venture was formed primarily to help Hershey ride Godrej's strong distribution chain in confectionery (through its Nutrine acquisition), none of the iconic Hershey brands have been brought into the Indian market in its five years of existence.

“The joint venture was formed for manufacturing and marketing sugar boiled confectionery for the Nutrine brand,” added Mr Mahendran, without referring to Hershey's confectionery portfolio.

Value chain

However, industry observers claim that Godrej Hershey has been unable to move up the value chain with its hard-boiled candies and the delay in bringing in the high-margin Hershey brands has taken its toll on the company which continues to make losses. In fact all these years the company has been running on Godrej-owned brands such as Nutrine and beverages such as Jumpin, Xs and Sofit.

Besides, in the past five years, the joint venture has already seen three MDs, Mr Dalip Sehgal, Mr Vivek Mathur and is currently headed by an expat, Mr Matt Lindsay, who has been with Hershey in the US.

Analysts tracking the FMCG sector feel valuations regarding Hershey's stake sale to either private equity players, strategic investors or even to Godrej Industries may be the reason the management is denying the move to dissolve the joint venture and dub it as being ‘speculative.'

Godrej would be willing to buy Hershey's stake at a discount while Hershey would look to sell at a premium , claim analysts.

Stake

At present, the US-based confectionery major, Hershey, has a 51 per cent stake in Godrej Hershey with Godrej Industries (43 per cent) and Mr Mahendran (6 per cent) owning the balance.

Related Topics