Will Kraft Foods Group Launch a Media Review in the Coming Weeks?
NORTHFIELD, IL: It was only a matter of time: Kraft Foods Group is expected to announce a media review in the coming weeks, sources said.
It’s not immediately clear if the process will cover global spending or only that for North America. Last year the marketer for brands like Oscar Mayer, Planters and Maxwell House spent $513.8 million on U.S. measured media, according to Kantar Media. Publicis Groupe’s Starcom is the incumbent on the business.
A Kraft Heinz spokesman had no comment.
In June, the company’s Mondelez unit which was spun off from Kraft in 2012, launched a $1.5 billion global review with plans to complete its search in the fall. Starcom’s corporate sibling MediaVest is an incumbent on the business.
The Kraft Foods review would be the latest challenge for Starcom, which has had to defend some of its largest clients over the past 16 months including Mars, Anheuser Busch InBev, and Samsung and is now an incumbent in media reviews like Procter & Gamble, GlaxoSmithKline and Citi.
The merger of Kraft and Heinz, set in motion by Warren Buffett’s Berkshire Hathaway and Brazilian private equity firm 3G Capital, created a combined company run by a group known for fiercely and quickly cutting costs. Just after the transaction closed in July, Kraft Heinz started to eliminate top marketing jobs at Kraft Foods, which has never been known as a lean organization. Last week, Kraft Heinz said it was laying off 2,500 workers–700 of them at Kraft Foods’ Northfield, Ill., headquarters.
So it’s little surprise media at Kraft Foods is coming under scrutiny. The company’s $500 million-plus in U.S. media investment dwarfs Heinz’s spending of $42 million. With the combined company’s intent to scale Kraft’s U.S.-focused business internationally, global resources and efficiencies will likely determine the outcome of a review process. Aside from Starcom’s handling of Kraft Food’s business in the U.S., Heinz works with Interpublic’s UM domestically and Omnicom’s OMG has responsibility for Heinz outside of America.