7 Get More Kraft, Less Bucks

The seven agencies that will handle Kraft Foods’ consumer promotions will work with lower profit margins, according to sources.
In giving fewer promotional shops more brands but with slightly lower fees, Kraft is repeating the approach it took in February when it consolidated U.S. creative assignments at five shops. At that time, Kraft told the five roster agencies it would no longer pay commissions on what it called “nonworking media,” such as ad production and talent and residual costs.
Wendy Kritt, Kraft’s director of corporate and consumer promotions who helped direct the process of reducing the promotional roster from perhaps 30 agencies to the seven announced last week, would not discuss compensation arrangements.
Kraft spends about $600 million annually on consumer promotions, Kritt said. Of that, sources estimate agency fees represent about $100 million. The Northfield, Ill.-based company spent $820 million on advertising last year, according to Competitive Media Reporting, and a like amount on trade promotions, Kritt said.
The shops selected to handle general market promotions and their key assignments are: Colangelo Group, South Norwalk, Conn. (Capri Sun, Handi-Snacks, Kool-Aid, Tang); Davidson Marketing, Chicago ( Oscar Mayer, Lunchables, Kraft Grated and Natural Cheeses, Velveeta, DiGiorno pasta, Tombstone pizza); East/West Creative, Chicago and New York (Crystal Light, Jell-O, Clausen, Louis Rich, kids promos); Frankel & Co., Chicago (dips, Philadelphia cream cheese, Kraft Macaroni & Cheese, Miracle Whip, Kraft Mayonnaise, cross-brand meal promos); Guild Group, White Plains, N.Y. (Cool Whip, Country Time, GFI coffees, Yuban); and Ryan Partnership, Chicago and New York (Post, multibrand promos).
Guild will also handle African American promotions and Zubi Advertising in Coral Gables, Fla., will develop Hispanic advertising.