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Hershey Co. launches Lancaster caramel brand

The Hershey Co. is launching a new candy brand, its first new brand in 30 years, a soft caramel crème line called Lancaster. And for the first time it is taking a double-barreled approach, debuting the candy in the United States and China at once.

The move comes as China increasingly becomes a focus for U.S.-based consumer-goods companies that are seeking to offset slower growth in developed markets like North America. Hershey, which makes candy such as Kit Kat, Twizzlers and Hershey's Kisses, said new products in both the United States and overseas helped its net income rise 18 percent in its most recent quarter.

"China and the U.S. are major focus markets for the company," said Steven Schiller, senior vice president of sweets and refreshment. China is the second-largest sweets market behind the United States, he added.

The Lancaster name stems from founder Milton Hershey's first candy company, The Lancaster Caramel Co. founded in 1886. And the candy comes after 2 1/2 years of research into consumer tastes and the global confectionary market.

A category the company calls "comforting richness" -- caramel or milk-based soft candy -- was undertapped, Hershey found, even though at $1.5 billion it was big business in China.

Caramel is also a fast-growing category globally, Schiller said, growing faster than chocolate and other non-chocolate candies. "It is one of the fastest-growing segments in the food industry," he said.

So Hershey developed caramels that could fit into the niche. The products in each country aren't identical but are tailored to their markets. In the United States Lancaster caramels will come in three flavors: caramel, vanilla and caramel, and vanilla and raspberry. In China the candies will be more similar to milk-based candies that are popular in that country.

The target demographic is men and women in their 20s and early 30s. The candy will hit U.S. store shelves in January 2014 and come in two sizes for about $4 and $2.50. In China it has already launched in three cities, with wider distribution set for 2014.


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