Citing cost considerations, PepsiCo last week consolidated nearly $350 million in creative and media duties at Omnicom Group from the Interpublic Group of Cos.' Foote, Cone & Belding.
Included in the shift were brands such as Gatorade, Tropicana, Aquafina and many Quaker brands, all of which were handled by FCB's Chicago and New York offices.
A possible shift of some brands had been anticipated after FCB parent True North Communications was acquired by IPG, whose McCann-Erickson unit handles Coca-Cola. In early August, PepsiCo bought The Quaker Oats Co., which markets most of the products that moved last week.
FCB CEO Brendan Ryan said PepsiCo notified him about the move on Wednesday night. "I was surprised by the decision because I certainly thought we had reached agreement that [a potential Coke conflict] would be OK," he said. "FCB did a fabulous job on each of these brands, and the sales results are there. In each of the categories we operated with these clients, the work was probably the best in the category."
This is the second huge account that Omnicom has pulled out from under FCB and its parent. In October 2000, DaimlerChrysler consolidated its $1 billion account at Omnicom from True North. Cost had been the main issue in the consolidation.
Dick Detweiler, PepsiCo vp of public relations, said the perceived Coke conflict issue was not necessarily a factor. "We were certainly aware of that, but this was an opportunity to achieve greater synergies among our brands," he said, declining further comment.
Detweiler said PepsiCo has not yet determined which Omnicom agencies will be the beneficiaries of the consolidation. An Omnicom rep said the company was happy about the consolidation, but declined further comment.