The marketer of such diverse brands as Skittles, M&M's, Uncle Ben's and Whiskas has been looking to consolidate its $300 million buying and planning business with one agency, a review initiated to forge relationships that offer more integrated ways to reach consumers. Now, it's inked a deal for its confection brands with Regal Entertainment Group, the country's largest movie-theater chain that offers Masterfoods sales exclusivity for brands such as M&M's and Skittles in the chain's more than 6,000 theaters (to the exclusion of major competitors Nestle and Hershey Foods) in addition to on-screen ads and promotions throughout the venues.
Such partnerships are more common among soft-drink companies, but are likely to become standard for marketers in other categories as reaching consumers at multiple touch points becomes increasingly necessary, said Stuart Shlossman, marketing services-commercial manager at Masterfoods.
"All of our marketing partners have to understand our need to communicate with customers with more than just a TV or print ad," Mr. Shlossman said. The media agency Masterfoods chooses must "bring that to the party," he said.
The deal with Regal, which controls more than 20% of theaters in the U.S. under the Regal Cinemas, United Artists Theatres and Edwards Theatres banners, is more about marketing than sales. Movie-theater concession sales-while growing-still make up a small portion of candy marketers' volume, less than 1% in the case of Nestle, according to an executive close to Nestle. (Still, the inability to sell its primary movie-concession brands Raisinettes, Goobers and Sno-Caps in Regal theaters is "not an inconsequential hit to volume" for Nestle, the executive said.)
Regal approached Nestle and Hershey in addition to Masterfoods for the long-term marketing partnership deal, according to Cliff Marks, president of marketing and sales for Regal's marketing division, Regal CineMedia. A spokeswoman for Nestle declined to comment as did a spokeswoman for Hershey.
Regal retains the right to sell candy from independent candy companies in categories that do not compete against Masterfoods brands, but consumers will not see some of the bigger brands they're used to.
"For consumers like my 13-year-old son that have to have their Twizzlers, it's going to be a terrible adjustment and they won't be happy," said Prudential Securities analyst John McMillin. But, he said, though he doesn't necessarily think it's good business, "it's become a way of life, like with Coke and Pepsi" that certain brands have a monopoly in certain venues.
Masterfoods has recently forged other unique media deals with partners including Walt Disney Co.'s ABC and America Online.
Mr. Shlossman said Regal is currently the only example of the type of sales/media deal it hopes to develop with other partners. "Now we have a role model of what we'd like to do," he said.
contributing: t.l. stanley