Kroger Names DDB New York as Its First-Ever Agency of Record

“Kroger is excited to partner with DDB New York to uplift our brand,” said Mike Donnelly, Kroger’s executive vice president and chief operating officer.

The Cincinnati-based company, founded in 1883, has north of $120 billion in annual sales and began its search in February to unify communications among its extensive portfolio. With an ad spend of more than $78 million from January to September 2018 (across Kroger, Fred Meyer, King Soopers, Mariano’s and Ralphs, according to Kantar Media), the goal is to better unify the collection of brands and create a more flexible platform that both DDB and Kroger’s internal teams can use.

“This is a big, matrix organization, and we’ve had an internal creative team since our inception,” said Mandy Rassi, Kroger’s head of brand building. “We were looking for a collaborative partner and, from our first meeting with DDB, they seemed to understand and intuitively get [the brand].”

“This is a brand that hasn’t had an [agency of record] before,” said Audrey Melofchik, president of DDB New York. “For them to choose us to reinvent the next stage of Kroger is exciting.”

According to Rassi, some of DDB’s past work with larger, more complex brands like McDonald’s and State Farm played a role in DDB rising to the top.

“DDB [has the] ability to navigate in complexity where we have an overarching brand, but that needs to come to life in local ways,” she said. “We needed a partner that can simplify the complexity and has broad enough shoulders and bandwidth to match us.”

The main remit for DDB, named the No. 2 network of the year at this year’s Cannes Lions, will be elevating Kroger’s brand position in a fairly commoditized retail grocery industry.

DDB will also work with the grocer’s existing agency partners including The Community, which focuses on the brand’s multicultural work, 84.51˚, the retailer’s own consumer insights subsidiary, and other stakeholders including 450,000 employees nationwide.

“When you have over 2,800 physical locations and 450,000 people, we need to bring them along and think about how the brand is in service to them,” noted Rassi, previously a 14-year veteran of Procter & Gamble in various global strategy and consumer insight roles. “And then, how they are in service to our customers underneath that.”

In terms of creativity, DDB “knocked our socks off” among all the agencies Kroger’s search team spoke with, according to Rassi. But like all new agency/brand relationships, culture also played a big role in the decision-making process.

“We wanted to be hands-on and personally involved with this search because it’s a big decision for us,” she said. “We had a great flow between the two teams and companies from the values and personality point of view.”

“We gelled from the beginning,” added Melofchik, who counts the Kroger win as the first major business agreement since she assumed the role of DDB president last April, replacing Chris Brown. “We felt like this was not only going to be a challenge but a fun one.”

Terms of the agreement were not disclosed. DDB New York is planning to staff up after winning the business and, according to Melofchik, the process proved to be a positive signal to the rest of the agency about its current leadership, including co-CCOs Lisa Topol and Derek Barnes who stepped into the roles from Grey in January.

New work for Kroger is expected to break in a few months.

“This was a pitch and brand that [the agency] saw their leadership having a great deal of passion for and spent [a lot] of time on it,” she said. “The agency watched us put our heads down. … [Y]ou can’t put into words what that does in terms of momentum and, overall, excitement in being part of the team.”

“We’re trying to transform a 135-year-old brand,” Rassi added. “I think we’re going to have a lot of fun, and it’s going to be hard at points. [But] there is something to be said for all us [working] together and being committed over the long haul.”