Time to do some aggregating.
In a move that should surprise exactly no one, the newly-formed Kraft-Heinz conglomerate has decided to review every one of its creative agency accounts…or so hears AdAge.
We’ve been unable to get anyone from Kraft-Heinz or its various agencies to comment on the record as of this post, but the story was inevitable: when two massive companies come together, some “efficiencies” are expected to follow. One anonymous source within an affected shop tells us that an all-agency meeting will go down this afternoon to address the pending review.
This move comes less than a year after Kraft’s big agency shakeup, which saw Droga5, The Martin Agency, W+K and several more lose business as the client narrowed its agency roster to mcgarrybowen, Leo Burnett, CP+B, Taxi and “some digital agencies.” It also follows the August consolidation of Kraft-Heinz’s media accounts with Publicis’ Starcom.
Again, pretty much everyone saw this coming. Back in March, WSJ’s CMO Today reported that quite a few unnamed agency execs were upset because Brazil’s 3G Capital Partners (which helped Warren Buffett’s Berkshire Hathaway organize the deal) was “not good for brand building…They cut costs, they consolidate.”
So they do.
The two companies combined spent $583 million on measured media in the U.S. last year according to Kantar Media, and that number will almost certainly drop moving forward as the new entity seems to value cost-cutting measures above all else.
After the merger went through in July, Kraft-Heinz announced its new leadership team–which includes several Brazilians but no chief marketing officer. The layoffs continued in August as the new company said that it would be cutting 2,500 jobs across North America. (This is not surprising either given that 3G cut 1,400 jobs at AB InBev after negotiating that merger in 2008.)
So the question now involves which agencies will lose accounts. Affected parties include:
- Leo Burnett
- David (which introduced Heinz’ new mustard in August)
- Cramer-Krasselt (which created the ketchup ad for the 2014 Super Bowl)
Bad news to come for some.