Spending up 40%: Hershey ups Kisses budget

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Hershey Foods will look to build its mostly seasonal $400 million Hershey's Kisses business into an everyday candy with the addition of 40% more in marketing on top of last year's $25 million outlay.

The renewed push against Kisses comes as part of an overall refocus of marketing attention on Hershey's six flagship brands under President-CEO Rick Lenny (AA, Sept. 16, 2002). Kisses will get the biggest boost, though, as Hershey spreads the word to consumers about a slew of activity on the brand, including a variety of limited-time entries, the launch of the first permanent new product under the Kisses in 10 years and new packaging.

"In 2003, we are looking to change the shape of the [Kisses] business by building loyalty and frequency with current Kisses buyers," said Don Gates Jr., director-U.S. marketing for the brand franchise. Mr. Gates said that Hershey research found that 75% of Kisses business was focused around Valentine's Day, Easter and holiday time periods, and "we needed to figure out ways to meet consumers' interest day in and day out."

While sales of non-seasonal Kisses for the 52 weeks ending April 20 were up 8.1% to $90.5 million compared to the same period a year ago, only Christmas and Halloween versions of the bite size chocolates saw similar sales increases. Sales of the Christmas Kisses were also up 8.1% to $63.9 million, while Halloween sales rose 3.8% to $11.2 million. Valentine's Day sales were off 4.5% to $28.3 million, while Easter sales were down 19.2% to $23.6 million. (All figures are according to Information Resources Inc., which tracks sales in supermarkets, drug stores and mass merchandisers, excluding Wal-mart.)

First, Hershey this month introduces special limited-edition Rich Dark and Toffee & Almonds varieties in special harlequin-style wrappers to gain interest outside of usual time periods. The varieties are being backed by print ads from Omnicom Group's DDB Worldwide, New York, in keeping with Hershey's "Simple Pleasures" campaign. Though the creative is the same, the media buy for the brand will skew to younger, hipper titles including Time Inc.'s Entertainment Weekly and In Style vs. its historical bent toward older-skewing magazines including Hearst Magazines' Good Housekeeping and Hachette Filipacchi Magazines' Woman's Day. "If we're trying to reach women 25 to 34, we have to be where they are," Mr. Gates said.

In July, Hershey will bring back the Rich Dark Kisses as a permanent item, announcing its first line extension in a decade with a $10 million TV, print and public relations effort touting the regal, purple-wrapped chocolates as "Our latest masterpiece." According to Mr. Gates, 25% of Americans choose dark chocolate as their first choice, and "we need to provide it for them," especially, he said as dark-chocolate consumers have been found to be more sophisticated, upscale and indulgent. Part of the public relations efforts surrounding the launch of Rich Dark will include information on the nutritional benefits of flavanoids, found especially in dark chocolate, and a fact that the company deems important in an environment where obesity has become such a large issue.

The Rich Dark launch has also prompted Hershey to alter packaging for Kisses for the first time in 30 years, with updated graphics and the removal of the "milk chocolate" flag underneath the Hershey's Kisses logo. The change opens the door for a variety of extensions, although Mr. Gates said the company will be cautious not to overextend the brand.

`kissable messages'

In September, Hershey will again try to drum up off-season sales with the launch of "Kissable Messages," quips such as "I love you" and "enjoy a kiss" on the plumes emerging from the Kisses' foil, which have never before communicated anything but the brand name. Kisses will also add a $2 million national campaign targeted to Hispanics, and is launching special packaging that doesn't include foil overwrap to drive sales in convenience stores, where the brand sees only 2% of its sales.

Hershey's other flagship brands, including Reese's, Kit Kat, Jolly Rancher, Hershey's and Ice Breakers, will also get new initiatives, including five limited-edition Reese's such as Dark Chocolate and White Chocolate, but Mr. Gates said internal research has shown Kisses to have "the biggest payback of marketing dollars spent."

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