In a significant departure from the expansion strategy adopted by most fast-moving consumer goods (FMCG) companies, Hershey India is exiting general trade distribution in non-metro markets and sharpening its focus on India’s top six cities as it pivots towards premium consumers and digital commerce.
The Pennsylvania-headquartered confectionery maker has informed employees of a strategic realignment that will prioritise investments in modern retail, quick commerce, e-commerce and general trade across the country’s largest metropolitan markets, while restructuring its presence in select traditional trade channels to improve profitability.
The move marks one of the rare instances of a global FMCG company reducing its footprint in India’s traditional retail network, even as rivals such as Hindustan Unilever, ITC, Mondelez India and Nestlé India continue expanding distribution through kirana stores in smaller towns and rural markets.
“Our brands are well positioned to benefit from the evolution of the Indian consumer,” said Rahul Jain, General Manager, Hershey India. “We are strengthening our presence in high-potential channels and refining our distribution model to focus on select general trade markets. Our India strategy is centred on top metro general trade markets and a strong omni-channel presence, where we have the strongest right to win and can best serve our consumers.”
The company is betting that India’s affluent urban consumers, coupled with the rapid expansion of quick commerce and e-commerce platforms, will generate stronger returns than broad-based expansion into lower-tier markets.
India has emerged as one of Hershey’s key growth markets globally, driven by rising premiumisation, urbanisation and increasing digital adoption. The company said sales of its chocolate bars and quick-commerce business have doubled, while categories such as syrups, spreads and baking products continue to register strong double-digit growth.
The strategic overhaul also comes as Hershey seeks to strengthen the financial performance of its India business. According to regulatory filings, the company’s revenue remained largely flat at ₹525.2 crore in the financial year ended March 2025, compared with ₹526.7 crore a year earlier, while its net loss narrowed to ₹68.6 crore from ₹82.6 crore.
The decision contrasts with the broader FMCG industry’s long-standing strategy of expanding physical distribution into smaller cities and villages, where general trade continues to account for more than three-fourths of total FMCG sales. However, premium categories are increasingly being driven by consumers shopping through organised retail, quick-commerce platforms and online marketplaces.
India’s chocolate and confectionery market is estimated to be worth around ₹25,000 crore, with chocolates and sugar confectionery contributing almost equally. Despite the market’s rapid growth, annual per-capita chocolate consumption in India remains at around 200 grams, compared with more than 10 kg in the UK, highlighting the substantial long-term growth potential as disposable incomes rise and consumers increasingly trade up to premium products.