The move would deliver a second blow to Interpublic Group of Cos., whose Lowe Lintas & Partners, New York, handles the $83 million Sprite account. Interpublic was slammed Sept. 21 with the loss to Omnicom Group of more than $350 million in media and creative assignments from rival soft-drink giant Pepsi-Cola Co. and PepsiCo. sibling Quaker Oats Co.
Lowe executives declined to comment on Sprite. Interpublic would not comment on its relationship with Coca-Cola, although there were indications that even as it loses Sprite, Interpublic could be in line to pick up additional assignments from the beverage marketer. An Ogilvy executive also declined to comment, as did a Coca-Cola spokesman.
Cliff Freeman & Partners, New York, had handled Fanta, but a spokesman said the agency resigned that account and the KMX energy drink in a letter to Coca-Cola dated Aug. 29.
The Pepsi/Quaker Oats moves involve creative and media for Gatorade, the market leader in sports drinks; Tropicana, the No. 1 refrigerated orange juice; and Aquafina, the top bottled water in the country. The brands had all been handled by Interpublic's Foote, Cone & Belding Worldwide, Chicago, and are worth a combined $119 million in billings, according to Taylor Nelson Sofres' CMR.
Omnicom, which already handled the bulk of PepsiCo's advertising, is expected to create a company affiliated with DDB Worldwide, Chicago, to handle Quaker Oats and Gatorade. BBDO Worldwide, New York, will get Tropicana, while Goodby, Silverstein & Partners, San Francisco, is expected to handle Aquafina. OMD will handle media buying for all brands.
Quaker Oats spent $251 million in measured media during 2000, according to CMR. FCB handled the bulk of Quaker's advertising, including all its cereals, such as Quaker Instant Oatmeal, Life and Cap'n Crunch, its Chewy Granola and Fruit & Oatmeal bars and Quaker rice cakes. FCB did not handle Quaker's Golden Grain rice and pasta businesses, including Near East couscous, Rice-a-Roni and Pasta Roni. Those brands, estimated at roughly $15 million in billings, will continue to be handled by Interpublic's Suissa Miller, Los Angeles.
An FCB spokesman said CEO Brendan Ryan would have no comment. Interpublic's stock, which traded above $47 in January, closed at $21.01 on Sept. 21, the day the news was announced.
The PepsiCo shifts were not a total surprise. Interpublic's acquisition of True North Communications earlier this year left the holding company with conflicts between the rival cola giants, and some fallout was expected.
"All of our financial models for the True North acquisition took into account the possibility of revenue loss from client conflict," Interpublic Chairman-CEO John J. Dooner Jr. said in a statement. "This shift in assignments is consistent with those models."
PepsiCo, in a statement, said the advertising consolidation "is an important part of a major corporate effort to achieve growth and cost synergies following the merger of PepsiCo and the Quaker Oats Co."
Contributing: Lisa Sanders, Stephanie Thompson, Richard Linnett and Kate MacArthur