Click the Add button on the toolbar or choose File > Add. An open panel will drop down in which you can select one or multiple files or folders to add to the archive. To add the new items to an existing folder within the archive, select that folder prior to issuing the Add command.
You can also drag files and folders from the Finder into the archive window. If you drop the new items onto a folder they will be added to this folder. The folders are spring loaded like folders in the Finder.