0.51% Walmart ad-to-sales percentage
It's a beautiful summer Friday afternoon and Kraft Foods Group Chief Marketing Officer Deanie Elsner takes a moment to enjoy the view. "I love Chicago," she says with pride, gazing out a window overlooking Lake Michigan, which is glistening in the July sunlight.
She is 34 stories high, on one of two newly renovated floors of a downtown office building. The packaged-food giant moved in about a month ago—even though the company's headquarters is just 20 miles to the north in a suburb called Northfield. Kraft opened the urban satellite office as an employee-recruitment tool and to be closer to several downtown ad agencies. The move follows other suburban-based marketers, such as Heineken USA, PepsiCo and Discover, which have also opened city offices in recent years.
Kraft began looking for a Windy City location soon after the company was formed in late 2012, after the old Kraft Foods Inc. split into two companies: Kraft Foods Group, which operates in North America, and the more internationally focused Mondelez International.
Roughly a third of Kraft's Chicago-area employees lives in or close to downtown, and several of its agencies are housed in the city, including McGarryBowen and Starcom. "In the spirit of how do we attract the best talent and keep them, we began to look for satellite space downtown so we could take advantage of our agencies and our media partnerships … but also use it as a launching point for the rest of the company as a meeting space," Ms. Elsner said.
The office at 401 N. Michigan Ave. is in a high-rent district. It occupies the top two floors of a building along the highly trafficked Magnificent Mile that neighbors the gothic Tribune Tower and is across the street from the iconic Wrigley Building.
The office has spectacular views of Lake Michigan and the Chicago River. Inside, the environment is open and casual, with a large training room, as well as long tables rather than cubicles where any employee can come in from Northfield, pick a spot, and plug in their laptops. There are even a couple of automated massage chairs, as well as a private room for nursing mothers.
Treadmills attached to elevated desks line one window so that employees can walk and work at the same time. The space can accommodate about 150 employees. Kraft has roughly 2,300 employees in the Chicago area.
Despite the pricey space, Ms. Elsner, who will be speaking at Ad Age's upcoming CMO Strategy Summit, said the company is close to breaking even on the urban investment. That's because Kraft used to rent temporary space for big downtown meetings and training sessions, which it no longer does. There are also intangible benefits, like putting Kraft's marketers closer to urban consumers. "When you come into the city there is an urgency and an energy that just pulses," Ms. Elsner said. "Like any focus group, you are putting yourself in the world of your consumers and a lot of our consumers live in big cities."
The office is also a boon for agency employees, who now routinely walk to meetings with Kraft, rather than endure the commute to Northfield, which can take an hour or more on a bad traffic day. "We are just so much more efficient. It takes us five minutes to get there," said Danielle Gonzales, an exec-VP managing director at Starcom who oversees the Kraft account. Plus, she said, "When you are in the city environment, your creative juices are high."
Others seizing on the creative urban vibe include Westchester County, N.Y.-based PepsiCo, which housed its global design and innovation team in New York City's Tribeca neighborhood in late 2013. Riverwoods Ill.-based Discover opened in downtown Chicago recently. White Plains-based Heineken USA opened an office on New York City's Park Avenue in 2010 for its marketing and innovation team. "Everything starts in big cities," said Heineken USA CMO Nuno Teles. "Just by watching consumers and how they behave you can really go deep into ... how we should approach communications."