On March 3, Nestlé announced via its official website that it has reached an agreement with the Hsu family to acquire the remaining 40% stake in Hsu Fu Chi. This move follows Nestlé’s initial $1.7 billion purchase of a 60% stake in 2011, which established it as the controlling shareholder. The latest acquisition secures full ownership of the Chinese confectionery giant.
Nestlé stated that the transaction will enable Hsu Fu Chi to more broadly and efficiently leverage Nestlé’s global brand and product resources to achieve its growth targets. Back in 2011, Hsu Fu Chi was already a leader in China’s candy market, with reported 2010 revenues of RMB 4.31 billion and net profits of RMB 602 million. At the time, the company operated four large factories in China and was valued at $2.87 billion.
Following the 2011 deal, Xu Cheng, then-CEO and chairman, continued to lead the joint venture. However, recent presidents Liu Xinggang and Su Qiang were not from the founding Hsu family but were appointed based on their experience at other brands.
Zhu Danpeng, a Chinese food industry analyst, told *National Business Daily* that the Hsu brothers, now advanced in age, likely opted to sell their remaining stake to Nestlé. He added that Hsu Fu Chi’s established brand influence, economies of scale, loyal consumer base, and robust supply chain would significantly bolster Nestlé’s position in China.
In 2024, Nestlé reported sales of approximately CHF 5 billion (RMB 40.3 billion) in Greater China, with organic growth (excluding M&A impacts) at 2.1%. Confectionery contributed 16.1% to this growth, driven by steady performance from Hsu Fu Chi and Nestlé’s Wafer Chocolate brand, alongside new product launches and e-commerce expansion.
Nielsen retail data for 2024 shows Hsu Fu Chi leading China’s bulk candy, bulk chocolate, and bulk pastry categories in hypermarket and supermarket channels, with over 30% market share in bulk candy and chocolate. Its bulk jelly category ranked second.
At Hsu Fu Chi’s 2024 product strategy launch in March, President Liu Xinggang highlighted that the company has achieved high growth for four consecutive years, surpassing RMB 7 billion in annual revenue. To align with consumer trends toward reduced sugar, Hsu Fu Chi has rolled out “zero-sugar” variants and introduced new products such as upgraded Bear Doctor soft candies, coconut-flavored jellies, and Nestlé Milo energy biscuits targeting fitness enthusiasts.
China’s confectionery market, valued at over RMB 100 billion in 2022, is projected to grow at an annual rate of around 5% over the next five years, according to Euromonitor International.
