BOCA RATON, FLA. — Consumers can expect to see and learn a lot more about Hostess Brand products in the coming years as the J.M. Smucker Co. plans to increase advertising spending around the business 50%. The marketing spend increase is part of Smucker’s five-step plan to establish Hostess as a major snack brand following its acquisition of the business in 2023.
Other components of the plan include a focus on innovation, expanding distribution, revenue growth management and a focus on e-commerce.
“Supporting base velocity growth will be a 50% increase in advertising to drive greater household penetration,” said Mark T. Smucker, chairman, president and chief executive officer, during a Feb. 21 presentation at the Consumer Analyst Group of New York conference. “We're primarily focused on growth consumer groups including Gen Z and millennial consumers on the go and millennial parents juggling it all.
“We have significant growth opportunities with millennial parents, especially through increased top-of-mind awareness, which lags behind competitors. Improving brand awareness and bringing young families into the franchise is key to long-term growth as snacking behaviors are passed down through generations.”
When asked by an analyst to clarify the length of time for the increased advertising spending, Mark Smucker said, “the plan is for it to be meaningful and permanent …”
Noting the success of Kazbars, which grew to over $30 million in retail sales in calendar 2023, its first full year in the market, Mark Smucker emphasized the role innovation will play in growing Hostess Brands.
“Historically, about 15% of Hostess Brands’ annual sales were from new products launched within the prior three years, and we will continue to invest in significant innovation for the category, consistent with evolving consumer preferences,” he said. “We will continue to bring innovation to the category later this year as we launch new Hostess products, flavors and seasonal offerings aligned to current consumer trends.”
Opportunities to expand distribution at retail include grocery, mass merchandisers and club stores via on shelf, in aisle displays and checkout, he said. In away-from-home channels consumers may begin to see more Hostess products at universities, travel lodging and entertainment.
The new distribution opportunities will require a focus on revenue growth management, specifically ensuring price pack architecture is used to optimize sales and improve mix benefits.
“Finally, we plan to accelerate growth for products sold through e-commerce by leveraging the strength of our capabilities and expertise in the channel,” Mark Smucker said. “With these multiple growth initiatives, we are engaging the consumer across their path to purchase and key snacking occasions from a morning sweet start to the lunchbox and afternoon reward and an evening treat.”
