Next week more than a half-dozen agencies meet with Chobani execs in credentials and chemistry meetings and even Brad Charron, the svp, marketing who kicked off the company’s creative review, was humbled by the caliber of agencies responding to the initial questionnaire, sources said.
Charron was not available for comment but last week tweeted “An incredibly tough decision to narrow down agency pitch list!” he wrote. “So many talented creatives!”
Those moving on to the next round underscore that observation. Among them are Wieden + Kennedy; Goodby, Silverstein & Partners; Droga5; Anomaly; Bartle Bogle Hegarty; and The Martin Agency, sources said. Based on the credentials meetings, Chobani will narrow the field to a handful of finalists. The company plans to select an agency by the end of August.
For a marketer not associated with great advertising or continuity in its agency relationships, for that matter—this is the brand’s second agency review this year alone—that’s quite an impressive list. But there again, it’s not often agencies find such compelling brand stories like Chobani, now a billion-dollar company which only sold its first tub of Greek yogurt in 2007. In doing so it would create a new product category that now commands 43 percent of all yogurt sales.
“It’s in that area of disrupting established categories,” said a top exec at an agency in the review, comparing Chobani to the likes of Chipolte, Honest Tea and Method cleaning products.
“There’s a sense that it is at an inflection point,” the exec continued. “I kind of describe it as Vitamin Water before Coca-Cola bought it.”
Chobani may present that great opportunity for an agency to take a brand to that next level and outsmart bigger players like Dannon and Yoplait which have made up for their late category start with marketing budgets that are bigger than the $52 million Chobani spent in media last year. Category leader Chobani will now have to think like a challenger as it competes with established multinationals like Danone, whose Dannon has gained share at Chobani’s expense.
While Chobani has yet to carve out a clear category image, it has been aggressively resorting to promotional tactics lately as the industry ramps up production capacity. Alexia Howard, senior analyst at Sanford C. Bernstein & Co., said Chobani’s percentage of sales spent on promotions rose to 54 percent in early May, up from 28 percent in 2012.
Yet, another exec at an agency participating in the review sees signs of inspiration at the marketer. “Things like doing the Chobani pop-up store in Soho shows they don’t want to just make three TV commercials.”
But agencies vying for the possibilities of a brand in transition now find themselves dealing with the unknowns of a marketing organization in transition with new faces and outside consultants, including Ark Advisors, which is managing the agency search.
Peter McGuinness, Chobani’s new chief marketing and brand officer, starts next week, the first time the former DDB Chicago CEO has worked within a client company. He knows Chobani well, having worked with it when he was chief at Gotham, which produced the brand’s first TV ads in 2011. (His wife has also worked with Chobani as a designer.) McGuinness has a broad range of marketing responsibilities that extend far beyond advertising, but he has a strong point of view about agencies, and Chobani said McGuinness “will be deeply involved in the (search) process.”
In addition to TV, Gotham’s initial campaign for Chobani in 2011 used the company’s website, outdoor and social media in a pitch asking “real” friends of the brand to share their Chobani “real love stories” by submitting videos, photos and comments. Later that year, Chobani launched an agency review to replace Gotham right after McGuinness left the shop.
Marketing svp Channon, who joined the company in April and initiated the agency search this summer, previously spent more than two years at Under Armour, most recently as head of marketing, China. Like Chobani, Under Armour’s brand appeal largely grew organically without the benefit of high-profile advertising and the athletic brand went up against deep-pocketed competitors like Nike. As now with Chobani, Under Armour needed to transition into its next stage of growth and the company launched its first global campaign earlier this year.
David Denholm, Chobani’s new president, COO who starts on July 29, came from Kellogg where he most recently ran the company’s core morning foods operations. The CPA was earlier the highly successful general manager of Kellogg’s Kashi and he gained an understanding of promoting healthy breakfast alternatives—valuable experience now in a Greek yogurt category where the protein-packed product is seen as a light meal rather than just a snack or desert like conventional yogurt. (Ironically, last year Kashi ran into controversy for using genetically-modified ingredients, which is currently an issue for Chobani as anti-GMO activists target the brand for its use of milk from cows eating genetically-modified feed.)
Chobani’s early advantages as category pioneer are over. A brand that hasn’t been built through advertising needs to become more serious about marketing consistency and the agencies it partners with.
“The fact that this pitch has become so public, receiving so much attention, makes me think they’ll clean up their act,” said a review participant. “If they don’t stick with an agency this time they’ll look like psychos. Of course that’s what the fourth wife always says.”
Bringing in a new CMO in the middle of an agency review is bound to raise eyebrows. But another agency exec in the review seemed nonplussed about the convergence of new marketing leaders and outside consultants at Chobani right now: “I’m not worried about the cluster at the moment.”
Of course this is before the agency meetings begin next week. The review is still in its honeymoon stage and, in any contest, an agency’s perspective can change after meeting the players inside an organization.