Hershey boosts ad spend by 15% in Q2

Hershey has boosted its ad spend in a big way, with plans to continue heading into some major confectionery seasons.

In its prepared remarks for its second quarter earnings report, the maker of Reese’s, Chipits and Twizzlers says “advertising and related consumer marketing increased approximately 15% in the second quarter, with robust investment across segments.”

Hershey is reporting a boost in profits and net sales for Q2. Net income attributable to the company for the quarter ended July 2 rose to $407 million USD, up from $315.6 million USD the prior year.

Net sales rose slightly to $2.49 billion USD in Q2 from $2.37 billion a year earlier. In North America, confectionery net sales were up 4.4% versus the same period last year.

“New capacity and increased brand investment should enable us to sustain this momentum in the second half as we provide consumers with even more of their favorite snacks for seasonal celebrations and expand distribution,” says Michele Buck, president and CEO of The Hershey Company.

Buck added that summer promotions for its Hershey S’mores packs, Twizzlers and syrup portfolio have already lead to a combined 11% sales lift versus last year, with a mix of “strong merchandising” combined with increased media investment. Retail sales for gum and mint brands also continue to outperform the confection category as a whole as workers return to the office.

According to the company, Hershey’s refreshment retail sales grew 26% in Q2, ahead of the overall refreshment category.

In this morning’s earnings call, Buck says she is expecting a “strong Halloween,” so Hershey plans to continue its strong marketing support to take advantage of that period.

Hershey’s salty snacks, which includes brands like Skinny Pop, had retail sales growth of 9.6%, with share gains of 40 basis points in the ready-to-eat popcorn category and 120 basis points in the pretzel category. The company says increased media has helped drive higher repeat on both.

Buck also said that private label competition has kicked up in snacks, but its investments have kept its brands performing well. There has also been increased private label competition within confection, but it’s less than 3% of the category as a whole.