Kellogg Needs Shops To Think Big For Cereal

Kellogg wants strategic category thinking, as opposed to creative ideas for individual brands, from the six agencies it is talking to as part of its plan to “evaluate its U.S. marketing programs,” sources said.
For the shops–Ammirati Puris Lintas, BBDO, Grey Advertising, Lowe & Partners/SMS and Young & Rubicam, all in New York, The Martin Agency in Richmond, Va., plus incumbents Burnett, JWT and minority shop Burrell Communications here–the process opens the door to an ad budget of about $335 million. Jone-Lundin Associates in Chicago is coordinating the process.
Although the cereal category is in decline–off 1 percent for the 52 weeks ending Aug. 9–Kellogg saw a 4.1 percent decrease in sales, per Information Resources. Those results came despite heavily backed new products, such as Smart Start and Breakfast Mates, handled by J. Walter Thompson, New York, and higher ad spending on core brands such as Special K, handled by Leo Burnett, Chicago. Kellogg has also initiated a major restructuring as it is under pressure from Wall Street to improve profitability.
Kellogg is hoping the shops will bring fresh ideas beyond new ads and the next campaign. It wants an overall approach it feels is lacking. To this end, Kellogg gave Y&R a project in March for its “functional” foods division, which develops products for health-conscious adults. The “brand asset valuator,” a proprietary database of thousands of consumer interviews, may help Y&R’s chances, sources said.
The agency with the most to lose from any assignment change is Burnett, since it handles the bulk of the client’s cereals. Lender’s bagels, Eggo waffles and other convenience foods are not under discussion. Burnett’s Starcom Media Services handles Kellogg’s buying chores.
Three of the shops will be dismissed this month. Kellogg said it intends to pick an agency in November. The new shop’s responsibilities have not yet been determined, a company representative said.