Leo Burnett, which has been Kellogg's lead agency for some 65 years, will retain other parts of the business, including big breakfast brands such as Frosted Flakes and Pop-Tarts. The agency will also continue as Special K's agency in Europe and Canada, according to an internal Leo Burnett memo obtained by Ad Age.
But in the U.S., the Special K loss is significant because it is has long been a priority for Kellogg. The brand consumed more than $120 million in measured media spending last year, according to Kantar Media. JWT also has a longstanding relationship with Kellogg, working with the company in some markets since the 1930s. The agency created work for Special K Red Berries in the early 2000s.
"We are incredibly proud of the contributions this agency has made to the success of Special K. In a little over a decade, we helped build the business from $412 million to almost $3 billion," Rich Stoddart, CEO at Leo Burnett North America, stated in the internal memo. "I'm proud of the smart and strategic work the team developed to help the brand address its current business challenges. We put great work on the table, but in the end, Kellogg bought an idea from JWT that tested better."
The memo noted that JWT, which currently works on Special K in Asia-Pacific, will also pick up the brand in Latin America.
Kellogg confirmed the change in a statement, noting that it was "expanding the role of JWT as our advertising agency on the Special K brand beyond the existing Asia Pacific region to the U.S. and Latin America. Leo Burnett will continue their great work as our adverting agency for Special K in both Europe and Canada."
A JWT spokeswoman declined to comment.
Special K has been stuck in a long-running sales slump, as it has struggled to adapt to the changing eating habits of Americans. Special K cereal sales in the U.S. fell 14.5% from 2013 to 2014 to $365.7 million, according to Euromonitor International. And the sales woes have leaked into other Special K branded products, including snack bars and cracker chips.
Kellogg has recently sought to repair the brand with a new strategy that moves away from marketing the brand as a diet food, as had long been the practice. Instead, the brand's marketing is playing up nutrition benefits, including whole grain, fiber, folic acid and Vitamin D. Ads by Leo Burnett that launched in April used the tagline "Eat special. Feel special," showing a woman leaping in slow-motion, while a print ad refers to the cereal as "nutritionally awesome."
Kellogg in its statement said that it "has the privilege to work with a range of world-class agencies. Together with our agency partners, we've brought many memorable campaigns to market over the years and we continue to do so."
The account shift is further proof that the struggles of big brands across the food and beverage industries are starting to take an increased toll on agencies and marketers, putting long-term relationships at risk and causing upheaval in the C-Suite.
Just this week, Anheuser-Busch InBev made yet another agency change on Bud Light brand, moving it to Wieden & Kennedy and away from BBDO. The brand was once safely parked at DDB, but in recent years has cycled through multiple shops as sales sagged. The account move came on the same day that MillerCoors changed chief marketing officers, promoting David Kroll to replace Andy England, who had been at the helm since 2008.
Meanwhile, the merger of Kraft Foods Group and Heinz, which finalized Thursday, led to the departure of several Kraft executives. Adland -- including agencies -- will surely be watching closely as the newly constituted Kraft Heinz company charts its course.
This story has been updated with a statement from Kellogg.