General Mills has consolidated shopper-marketing duties with a team of WPP agencies, as the food giant says it will put "increased focus" on the discipline, including e-commerce.
The WPP shops will "provide ecommerce, multi-cultural, display and shopper insights and advertising support for General Mills brands from a creative and digital hub in Minneapolis and regional offices in key retail markets," the company said in a statement.
"This increased focus on shopper marketing will assist us in building truly differentiated shopper plans geared to accelerate growth for our brands and our retail partners," Brian Kittelson, the company's director of shopper marketing, said in a statement.
General Mills, whose brands include Cheerios, Yoplait and Betty Crocker, is the nation's 44th-largest ad spender, shoveling out $894.2 million last year, according to the Ad Age DataCenter. For creative advertising, the company primarily uses Publicis Groupe's Saatchi & Saatchi and Interpublic Group's McCann Erickson.
The shopper-agency move comes as big packaged-food companies struggle to find the right balance of traditional advertising, merchandising and shopper-marketing support. CPG marketers are also navigating a new environment in which e-commerce is playing a bigger role, as companies such as Amazon invest heavily behind selling groceries online. The digital and physical store worlds are connected because some shoppers research products on smartphones as they browse supermarkets.
At bricks-and-mortar stores, big brands -- which have traditionally dominated shelves -- are increasingly battling smaller brands that are winning more retailer support as consumer preferences shift.
"The amount of quality merchandising support, which includes retailer advertisements and in-store displays, has increased as retailers compete for more growth," Shawn O'Grady, General Mills' senior VP for sales and channel development, told analysts this summer at the company's investor day. "But this increased frequency of events means that the consumer is getting saturated with offers, so that the effectiveness of that merchandising has declined."
The company's strategy, he said, is to "make sure that merchandising is tightly focused on the largest and most powerful brands." He added: "When we provide merchandising around themes that customers care about, include our biggest brands and create in-store excitement with advertising and displays, we tend to generate two times to three times the sales volume on our products than if they had not been merchandising. So we believe partnering with our retailers on a tighter, more focused approach is the way to win as we go forward."
The shopper-agency move comes as General Mills shuffles its leadership ranks. Longtime Chief Marketing Officer Mark Addicks will retire next year and be replaced by Ann Simonds, currently president of General Mills' baking products division, the company recently announced.