Hershey gets into cookie jar

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Hershey Foods Corp. is betting against the odds that it can successfully extend its candy brands into cookies.

With the $3.5 billion category down nearly 5% and Masterfoods USA still struggling to build its own candy/cookie hybrids after more than two years and $36 million in media, Hershey has announced its intentions to launch four varieties of cookies based on its top brands in December.

Rick Lenny, Hershey chairman-CEO, said to analysts in a conference call that the single-serve chocolate-dipped cookie versions of its Reese's, Hershey's, Almond Joy and York Peppermint Patty brands are intended for convenience stores, where they will be displayed next to existing candy brands for incremental sales.

Masterfoods had limited success with its 2002 launch of Cookies & brand-a line of single-serve shortbread-based cookie bars with a layer of chocolate and a candy layer of Snickers, Twix, M&M's or Milky Way. Last year, the brand was expanded into multiple-serving packages for family consumption. They, too, have failed to move the needle. Sales for the brand fell 32.6%, to $35 million, in food, drug and mass outlets excluding Wal-Mart for the 52 weeks ended Oct. 3, per Information Resources Inc.

`slow build'

"This has been a slow build for us," said Masterfoods spokesman Jeffrey Moran. He said Masterfoods has not really "delved deep [with distribution] for either singles or the family-pack." However, advertising expenditures have been fairly significant, with TNS Media Intelligence/CMR figures totaling $36 million in measured media since January 2002.

In the face of the Hershey launch, in November Masterfoods will re-run the "A little naughty..." ad campaign for the Cookies & brand that first broke in June. It was developed by former agency Grey Worldwide; the brand recently moved advertising to Omnicom Group's TWBA Worldwide.

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