Nestlé Launches Agency Review; 'Everybody Is Under the Microscope'

Planning and Buying for Media and Digital First Order of Business

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Nestle USA has launched an agency review for media and digital planning and buying, Ad Age has learned. The review will likely mark the beginning of an exhaustive look at all of the company's agency relationships as it seeks cost savings under new CEO Paul Grimwood.

"Everybody is under the microscope right now," said a person familiar with the company's plans. "Clearly there is going to be a priority put on bringing down costs." Nestle USA -- whose brands include DiGiorno, Stouffer's and Lean Cuisine -- is the largest of five Nestle divisions in the U.S., which together spent $793 million on measured media in 2011, according to Ad Age DataCenter's analysis of Kantar Media data.

A Nestlé USA spokeswoman confirmed the planning and buying review for media and digital, which will include Nestle Waters North America, Nestle Nutrition, Nestle Purina PetCare and Nestle Professional in addition to Nestle USA. The incumbent agency is ZenithOptimedia. "This is a regular part of our business to look at best in class services and to drive efficiencies," Hannah Coan, VP-corporate & brand affairs for Nestlé USA, said in a statement to Ad Age . "We have informed ZenithOptimedia, who is our current partner and will be a part of the review of our decision." She said that "we expect to have a decision by the end of first quarter 2013."

Nestle Waters North America, Nestle Nutrition, Nestle Purina PetCare and Nestle Professional are not expected to be included in the creative, PR and digital agency reviews.

ZenithOptimedia declined to comment.

Nestlé is also reviewing creative advertising, PR and digital duties on Juicy Juice, which it may consolidate with one agency, said a person familiar with the matter. At present, the brand's creative advertising is at Publicis, Dallas; PR is at Edelman; and digital with Genex in California.

Other agencies with big pieces of Nestlé business include: DraftFCB, which has DiGiorno, Jack 's Pizza and Tombstone; Goodby, Silverstein & Partners, with Dreyer's/Edy's; JWT, which has Skinny Cow, Stouffer's, Lean Cuisine and Toll House; and Publicis, with Buitoni, Hot Pockets and Coffee-mate.

Nestlé USA is said to be putting a premium on finding efficiencies -- in some cases though agency consolidation -- while being able to more directly tie advertising to sales results. Nestlé USA, which had sales of $10 billion in 2011, is part of Switzerland-based Nestlé S.A., the largest food company in the world.

Mr. Grimwood, former CEO of Nestlé U.K. & Ireland, joined Nestlé USA on Aug. 3, replacing Brad Alford, who retired as chairman-CEO in October after 32 years at the company.

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