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Momvertising Opps: #328 Kellogg adds shopper, promotional marketing shop (Score 69)
We recently told you all about Kellogg's new CEO and turnaround efforts, so it makes sense that a new agency partner would be brought on board (more info below). As far as the rest of the CPG giant's agency roster, it is, in general, well-past average AOR tenure. It currently includes: told AdA ge last month.
Turnaround plans generally signal that every aspect of the business will be evaluated and reviewed, and this includes roster shops. Plus, one review usually begins a domino-effect of sorts and triggers subsequent reviews.
Below was originally published on 10/16:
To combat the decline, Kellogg has expanded its core breakfast portfolio, entering the snack and better-for-you (BFY) markets in recent years. In fact, the company recently announced plans to buy protein bar company RxBar. While the ingredients of RxBars will not change, the brand will be able to take advantage of Kellogg's team and resources. Look for marketing dollars to increase as Kellogg further develops the brand post-acquisition.
Outgiong CEO John Bryant wrote in a guest column back in September for the Battle Creek Enquirer (Kellogg's HQ) that: "We will always be a cereal company at heart. However, changes in the food industry dynamics and consumer needs in recent years have required us to think differently about our business, how we operate and the foods we make."
The addition of an external CEO should signal that a major overhaul is about to take place. Cahillane joins Kellogg from Nature's Bounty, where he had been CEO since 2014. This certainly seems to indicate a commitment by Kellogg to shed its junk food perception in favor of healthier options. In a survey, Mintel found that nearly 70% of millennials surveyed in the US wished cereal “kept me fuller for longer” and 45% said it gave them a sugar rush. In addition, 56% of them thought cereal needed to be more portable and 39% said it was inconvenient because they had “to clear dishes after preparing it.”
In August's Q2 earnings call, Bryant mentioned that Kellogg has a "new marketing model." During Q2, he said that "there's evidence that we are making progress toward making our brand-building more effective and efficient." This can be seen in the brands "we've invested behind," such as Froot Loops, Frosted Flakes, Cheez-It and Rice Krispies (he specifically called out these brands).
Financial results from Q2 show that Kellogg is making "gradual improvement" in net sales performance. And while cereal consumption "remained soft" category-wide, execs say that there were some share gains in kids brands. During Q2, Kellogg launched a new campaign for Special K, which repositioned the brand from a weight loss brand to one that symbolizes "inner strength."
At the Pringles brand is a priority moving forward, as is sustaining momentum behind "US power brands." See chart for a sales breakdown between cereal and snack offerings. It was also pointed out that Kellogg is currently in the "transform" segment of their US Snacks roadmap, which includes launching agile marketing and defining a new playbook for snack brands.
Moving into 2018/2019 ("Accelerate"), Kellogg is looking to expand across channels and increase brand investment in the category. This specifically means the company is increasing brand building and prioritizing by demand and ROI. Kellogg will also expand its digital presence, aiming for 65% of spend to go to digital/social with campaigns that "behaviorally lever the digital medium." Look for new brand campaigns for Cheez-It, Pringles and Rice Krispies, as well as master brand campaigns for Keebler and Special K.
Sellers - Kellogg has decreased national TV spend this year, while increasing digital display spend. Access a breakdown of this spend across Kellogg's brand portfolio here.
Agency readers - Kellogg's AOR roster is, in general, past average AOR tenure (2.5-3 years) and includes Starcom as media AOR (since 2006). Turnaround plans generally signal that every aspect of the business will be evaluated and reviewed, and this includes roster shops.