PHILADELPHIA -- Hershey Foods Corp., the colossus of American chocolate, is looking to Europe's sweet tooth for its future growth, a company executive said yesterday.
Michael F. Pasquale, the company's chief financial officer, said Europe was the centerpiece of a strategy to expand the Hershey empire into international markets. Last year, overseas sales were only about 5 percent of total revenues of $2.9 billion.
"We would like to have the No. 1 market share worldwide," Mr. Pasquale told a gathering of Philadelphia financial analysts in Radnor, Pa. Hershey now trails Nestle SA, the Swiss food conglomerate, and Mars Inc., the privately owned McLean, Va., company whose products include the M&M and Mars candies.
Like many American food companies, Hershey, which is based in Hershey, Pa., has had little success in expanding its brand-name lines into Europe, where consumers have proved loyal to domestic brands.
Mr. Pasquale said Hershey brands now had no substantial presence in Britain, Germany or France. The company's overseas sales are primarily in Mexico, the Philippines, South Korea and Japan.
However, the company is fast building the European business through acquisition, he said. Last year, it bought the Gubor chocolate business in Germany, which generates $100 million in annual sales, he said. And it has opened a European development office in Brussels, Belgium.
Mr. Pasquale said Gubor had two chocolate plants in southern Germany and has surpassed Hershey's expectations with sales of its pralines and seasonal chocolates.
Turning to the U.S. market, Mr. Pasquale noted that Hershey achieved record sales and earnings in 1991 despite the economic downturn. Sales were up 7 percent and profits rose by 2 percent, to $219.5 million. U.S. chocolate sales accounted for about three-quarters of sales, he said.
Competition continues to be fierce with arch-rival Mars, Mr. Pasquale said. Hershey is still the U.S. market leader, he said, although Mars has narrowed the gap. Industry figures show Hershey with roughly a 35 percent market share, and Mars close behind at about 32 percent.