The Hershey Company
) recently announced the appointment of Universal McCann as its
global media planning and buying partner to handle its media
The selection followed a rigorous eight-month review process
that began earlier this year. Universal McCann will handle all of
Hershey's media assignments including all paid media (TV, print
and digital) in the U.S as well as internationally.
Hershey continuously invests in advertising and marketing
capabilities to build its brands globally and monitors the
performance of its brands. This has resulted in volume trend
improvement and consistent market share gains in the U.S. over
the past many years.
In the recently reported quarter (second-quarter 2013),
increased advertising investments, consumer promotions and
innovation improved volume trends of core brands in the U.S. In
the quarter, volume added 6.6 percentage points (pp) to revenue
growth (better than the 5.3 pp in the first quarter) driven by
strong volume trends and market share gains of core brands like
Hershey's, Reese's, Kit Kat and Ice Breakers.
Advertising costs comprise a significant part of the company's
expenditures and are expected to increase 20% in 2013 to support
product launches in both the U.S. and internationally.
In 2013, the company expects net sales to increase about 7% on
the back of volume growth of core brands in the U.S. and the
expansion of five core brands in international markets driven by
increased investments in advertising and go-to-market
The company's brand investments give it a competitive
advantage and are one of the principal reasons behind the company
witnessing better volume elasticity versus peers.
Other Stocks to Consider
Hershey carries a Zacks Rank #2 (Buy). Another
food/confectionery company worth considering includes
Crumbs Bake Shop, Inc.
) carrying a Zacks Rank #2 (Buy). Some other food companies which
are currently doing well include
Pinnacle Foods Inc.
Dole Food Company Inc.
). While Pinnacle Foods carries a Zacks Rank #1 (Strong Buy),
Dole Food Company carries a Zacks Rank #2 (Buy).
CRUMBS BAKE SHP (CRMB): Free Stock Analysis
DOLE FOOD CO (DOLE): Free Stock Analysis
HERSHEY CO/THE (HSY): Free Stock Analysis
PINNACLE FOODS (PF): Free Stock Analysis
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