Hershey Brings Three New Agencies Aboard

Anomaly, Barkley and Argonaut Will Oversee Strategic Project Work

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Credit: The Hershey's Company/Business Wire

Hershey Co. is adding three new agencies to its roster after completing a creative review that began in January.

The shops selected tor strategic projects are Anomaly, New York; Barkley, Kansas City; and Argonaut, San Francisco. Incumbents Arnold Worldwide and Havas Worldwide were not part of the review and will remain with the candy giant, according to Hershey spokeswoman Anna Lingeris.

The "Arnold/Havas work is continuing and this is not a replacement, it's just an addition," she said.

Hershey declined to describe the specific brand assignments for its new agencies. Ms. Lingeris said that the additional shops will "provide a diverse set of ideas" for the marketer's growing list of advertised brands.

Recent additions to the marketer's brand portfolio include Hershey's Caramels, which were announced earlier this week and are made with sea salt, molasses and fresh dairy butter. Earlier this year the company entered the meat snacks category with the acquisition of Krave Pure Foods, maker of Krave premium jerky.

In the first quarter, Hershey increased its advertising and related consumer marketing expenses by about 8%, which was in line with expectations, the company reported this week. For 2014, Hershey spent $726 million on measured media across its brands in the U.S., which include Hershey, Reeses, Jolly Rancher, Kit Kat and Ice Breakers, according to Kantar Media.

For the first quarter, Hershey reported consolidated net sales of $1.94 billion, compared with $1.87 billion for first quarter of 2014. North American sales exceeded expectations, but international sales underperformed as a result of weakness in China.

"Hershey has enjoyed strong, steady top and bottom line performance over the past several years in the attractive U.S. confectionery category based on increasing ad spend, steady innovation and strong sales execution," Sanford C. Bernstein said in a report this week. Candy, mint and gum "appears to be growing at rates faster than other packaged food overall, as snacks remain on trend, particularly among Millennials," the report said.

But Bernstein added that the question now is "whether Hershey's chocolate could see a new era of somewhat slower growth based on health and wellness concerns among consumers and the premiumization of the chocolate category in the U.S." The report stated that "the next big growth theme is likely to be acquiring premium products in other snack categories in the U.S.," citing the Krave jerky deal as an example.

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