Visibility is a key driver for David J. West, president and chief executive officer of the Hershey Co. , which is based in the company’s namesake town in Pennsylvania. By the end of this year, West will have doubled the advertising budget from 2006, resulting in increased market share and solid sales momentum after several years of flat sales.
Look for Reese’s Perfect, Hershey’s Pure and Hershey’s Bliss ad spots to run throughout the rest of the year. The NCAA “March Madness” Basketball Tournament that featured on-pack promotions across the Hershey’s, Reese’s, Kit Kat and PayDay brands, as well as a co-promotion with Coke, contributed to positive first-quarter results with gains in net sales, profitability and market share.
West is putting additional resources behind in-store merchandising, including S’mores. The company will sponsor the country band Rascal Flatts and will support its concert tour through TV ads.
Besides more ad visibility, the company has “increased the number of ‘feet on the street,’ resulting in 30% more hours in retail outlets,” West told SN. He said his role at Hershey is “to put the right people in the right roles” and provide what they need to succeed.
According to the numbers, West and Hershey’s support staff are doing just that. Year-end sales, ending Dec. 31, 2008, were up 3.8% to $5.1 billion. First-quarter sales, ending April 5, 2009, rose 6.5% to $1.2 billion, despite commodity price hikes and the recession.
For the rest of 2009, West will continue to increase investment in brands, R&D and innovation. This starts with a better understanding of the consumer, he said. The process has begun with an in-depth market structure and category segmentation review. West said the review “targets key consumer segments that will drive growth.”
— Jessica Assimon