That move will only cause minor ripples on the ad agency side, but larger shifts could follow if Unilever extends its reorganization to other units-specifically, a combination of Helene Curtis Industries and Chesebrough-Pond's, a move being debated by the $44 billion Anglo-Dutch conglomerate.
EXPLOITING RETAIL CLOUT
Deciding to finally take advantage of its growing retail clout in foods, Unilever in June asked A.T. Kearney to study the benefits of combining Lipton with Van den Bergh. The study, which grew from a global reorganization begun early this year (AA, Jan. 8, et seq.), is nearly completed and will recommend uniting the two operations, executives familiar with the recommendations said.
"There will be huge economies of scale for distribution," said one agency executive familiar with Unilever's decision to combine the two. Lipton and Van den Bergh "now call on the same customers, have their own sales forces. Together, they will have much more distribution clout-like $12 billion in sales rather than $6 billion individually."
Unilever watchers believe Patrick Cescau, president-CEO of Van den Bergh, will head the combined food units. That was made more likely by the departure earlier this summer of Lipton President Blaine Hess, who was not replaced.
A Unilever spokesman said the study is still ongoing and "no decision has been taken" as to merging the two units.
The Lipton-Van den Bergh union would cause only minor fallout among the core agencies for those two units: McCann-Erickson Worldwide, Ammirati Puris Lintas and J. Walter Thompson USA, all New York.
It's expected that any shifts would likely cut out McCann, agency for Mrs. Butterworth's and I Can't Believe It's Not Butter, relatively minor brands that spent about $13 million last year combined, according to Competitive Reshuffling Media Reporting.
McCann would likely keep the $30 million Good Humor business.
The other logical agency to lose business is Dailey & Associates, Los Angeles, with only a few million dollars in billings for Lawry's.
JWT handles $25 million in Lipton teas; Ammirati handled $45 million last year for Ragu, Lipton side dishes and Wish-Bone.
WHEN TO MERGE
The bigger shift is expected to happen if Unilever decides to merge Helene Curtis with Chesebrough. Such a matchup is under discussion internally, where the key question is said to be when, not whether, to merge the two.
The Unilever spokesman said no decision has been made on combining those units.
DDB Needham Worldwide, Chicago, is the only remaining Curtis consumer shop that is not also a core Unilever agency. In late June, Curtis moved its $10 million Suave business from Bayer Bess Vanderwarker to Ogilvy & Mather, Chicago, a Unilever core agency along with McCann, Ammirati and JWT. DDB Needham so far retains more than $80 million in Curtis billings.
Separately, Unilever prestige beauty unit Elizabeth Arden Co. has already begun looking at the way it handles advertising.
Traditionally done in-house, Arden is starting to cast an eye at outside agencies with the thought of parceling out some of its $100 million marketing account. Ammirati is said to have won an undisclosed assignment. Arden executives could not be reached for comment.