Newly merged food giant Kraft Heinz will consolidate media planning and buying in the U.S. with Publicis Groupe's Starcom. The move means Starcom -- which had been the incumbent for the former Kraft Foods Group Co. -- will pick up Heinz brands in the U.S., which had been at Interpublic's UM.
"As we work to build something truly special at The Kraft Heinz Company, we are examining every aspect of our business to ensure we are operating efficiently and effectively, and best positioning the company to deliver on the needs of our consumers. In this spirit, we have decided to consolidate all media planning and buying for Kraft Heinz with Starcom, effective immediately," Kraft Heinz spokesman Michael
The change shows how a mega-merger and change of ownership can have a direct effect on agencies, often in unpredictable ways. It was only last year when H.J. Heinz Co. -- fresh off its 2013 acquisition by Berkshire Hathaway and 3G Capital -- moved to UM in the U.S., while consolidating its global business at Omnicom Media Group, which had already been handling the business in some international markets.
After Berkshire and 3G teamed up again this year to orchestrate the Heinz-Kraft merger, speculation swirled that the new ownership would launch a media review. Instead, the company's new managers decided to consolidate with Starcom in a move that comes less than two months after the merger was finalized on July 2.
While UM might have had some advantages because of its familiarity with top management at Heinz -- who now are running Kraft Heinz -- Starcom had a leg up because the Kraft brands spend a lot more than Heinz brands domestically. The legacy Kraft Foods Group brands, which include Oscar Mayer, Philadelphia and Planters, spent $569.3 million on measured media in 2014 in the U.S., according to Kantar Media. Heinz brands, including the namesake ketchup and packaged foods such as Ore-Ida, spent just $44.2 million.
In the statement, Mr. Mullen credited Starcom for helping the company make "unprecedented strides in unlocking the value of data in the industry, and we will continue to leverage groundbreaking data innovation to enable our brands to achieve more effective consumer connections at the most effective cost." He added that "the decision to consolidate the business was not made lightly. We have enjoyed a great relationship with Universal McCann."