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Bars, Kisses and Reese's get boost
Hershey Foods Corp.'s new President-CEO Rick Lenny is taking a page from competitor M&M/Mars' playbook with his strategy to increase ad spending behind the company's top brands, improve creative and pare the product line.
Mr. Lenny will boost spending for key brands-among them Reese's, Hershey's bars and Hershey's Kisses-by reallocating money from lesser brands. Just as important, Hershey soon will have an additional source of ad money: It expects to save $65 million annually in corporate expenses when a current restructuring is completed. It plans to invest half that money in sales and marketing, putting half the savings into advertising.
Hershey has not been leveraging its "scale brands," spending only 3.8% of net sales on advertising in 2000 vs. a food company average of 6.4%, Mr. Lenny told analysts last week. More than half of Hershey's ad spending has gone in recent years to products that generate just 30% of revenue, he said.
Mr. Lenny intends to focus most of Hershey's ad budget on just a...