The move means that independent Venables Bell & Partners in San Francisco will lose duties for several brands, including: Orville Redenbacher, Slim Jim and Healthy Choice. Venables Bell worked on Orville Redenbacher for six years; in 2007 the business was shifted over from MDC Partners' CP&B, which infamously reanimated the late popcorn brand founder Orville Redenbacher, earning the campaign the name "Deadenbacher."
In addition, P.F. Chang's restaurants and Hebrew National, also owned by ConAgra, were technically on Venables Bell's roster, though ad spending and development of new work has been pretty stagnant. Those accounts will also move to DDB. The consolidated business will be handled out of the network's operation in San Francisco, which is known as DDB California. The office has been on ConAgra's roster, working on other brands such as Marie Callender's, Pam cooking spray and Rotel.
Representatives for both agencies declined to comment on the matter. ConAgra did not return calls seeking comment by press time.
The agency consolidation comes after CEO Gary Rodkin on Sept. 19 said the company had begun "cost-management" initiatives in the face of disappointing food volume sales for the quarter ending Aug. 25, which he blamed on "category and customer challenges."
For the quarter, ConAgra reported consumer foods advertising and promotion expenses of $104 million, up some 14% from a year earlier. But Mr. Rodkin signaled that the company might begin to taper the ad-spending increases. "We had been on a path of increasing our marketing dollars over the last several years, but this environment calls for some course correction toward more in-store merchandising, and we've begun the process on a category-by-category, customer-by-customer basis and, most importantly, within financially responsible guidelines," he said on the earnings call, according to a transcript.
One of the company's weak spots is in frozen foods, a category where established brands have been suffering from weak consumer demand and competition from new entrants, Sanford C. Bernstein analyst Alexia Howard noted in a report late last month. ConAgra's frozen-entree brand sales fell 6% in the year ending Aug. 31, including a 12.7% drop for Healthy Choice, according to the report, which cited Nielsen data. All the while, smaller brands have gained share. "It seems that there may be some 'refragmentation' of the category as niche,; premium brands win favor with the customer," Ms. Howard said in the report.
ConAgra's popcorn sales -- which include Orville Redenbacher's -- have also suffered, with the company losing 3.3 share points in the past year, even as the broader category "is still growing healthily" spurred by smaller premium brands, according to Sanford C. Bernstein.
On the bright side, "commodity costs pressures are easing," the Bernstein report noted, adding that "after a period of intense input cost pressure in 2011 and 2012, ConAgra could enjoy a benign input cost outlook" until the end of 2014.