Hershey Moves Fast into Snacks

Hershey Foods, known through retailing circles for its plethora of new products, will be introducing even more as it moves more aggressively into snacks.

While some retailers groused about yet more shelf entries, others questioned whether the Hershey, Pa.-based company was overreaching by going into already-competitive categories not known for indulgence items, like granola bars, according to a report by Brandweek, a Convenience Store News sister publication.

The products will be supported with a broad range of marketing, in-store support, and television and print advertising efforts starting in April, according to the magazine. A budget was not disclosed. Media spending for all of Hershey's confections and snacks last year was $125 million, with $25 million allotted for snacks, of which SmartZone garnered about $10 million, per Nielsen Monitor-Plus.

"Granola bars are perceived as healthy foods. And while Hershey's has a lot going for it, there will be a disconnect at stores. You can't take a candy brand and make it into a healthy food," Jack Trout, a principal of Trout & Partners, Greenwich, Conn., told Brandweek.

The granola bar lineup, which includes Reese's Sweet & Salty and Hershey's Sweet & Salty granola bars with pretzels and peanuts, respectively, follow Hershey's two-year-old rice Snack Barz, now the No. 2 brand behind Kellogg's Rice Krispies Treats for the year
ending Jan. 22, per IRI. Among other new snacks:

? Hershey's Snacksters, packing multigrain cereal, chocolate chip cookies and chocolate chips. There's also a Reese's version with peanut butter chips, cereal squares and pieces of hard candy.

? Kisses Mini Cookies, a new, Kiss-shaped entry in the cookies category.

? A trail mix SKU of PayDay Caramel bars backed by a tie-in with Minor League Baseball.

Analyst Andrew Lazar with Lehman Brothers said Hershey's goal is to snatch 9 to 12 percent of the overall $65 billion snack market and move its share of the single-serve snack market from 19 percent to 25 percent.

"Given Hershey's structural advantages, in terms of its scale, relative market share and industry-leading go-to-market capability, more share gains are likely, which augurs well for the company," he told the magazine.

Ken Harris, managing director at Cannondale Associates, Evanston, Ill., was encouraging. "Go get 'em Hershey's," he said. "They've done a great job with candy.

They're trying to define themselves as a food company. As long as they stay on point with the consumers they're targeting, they have a good chance they'll make it."