Bacardi Shifts Creative, Media to BBDO and OMD

Omnicom Group is the Big Winner In Consolidation Move

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In a major consolidation move, liquor marketer Bacardi Limited is shifting global creative duties to BBDO Worldwide and media responsibilities to OMD Worldwide. The two Omnicom Group agencies will oversee the marketer's namesake rum and other major bands including Grey Goose, Martini, Bombay Sapphire, Dewars, William Lawson's, Cazadores and St. Germain.

BBDO will direct creative and strategic development, Bacardi said in a statement on Wednesday. OMD will "lead planning and buying across all social, digital and media platforms, with a particular emphasis on innovative and cutting-edge ideas, rooted in data-driven insights, to reach millennial consumers," according to the statement.

The company considered several agency options but did not hold a formal review, said Chief Marketing Officer Dmitry "Dima" Ivanov. "This is a big thing for this company," he said in an interview. "We've never had a big lead partner all around the world working with us."

Bermuda-based Bacardi -- which is the world's largest privately held spirits company -- spent $74 million on measured media in the U.S. in 2014, according to Kantar Media. As of 2013 the company ranked as the 131st-largest ad spender in the states, according to the latest ranking from the Ad Age DataCenter.

Bacardi previously worked with many agencies around the world. Key shops included Havas-owned BETC, which has handled global creative for Bacardi rum. Media has been handled by WPP's Mindshare in the U.S., and by Publicis Groupe's ZenithOptimedia in Europe. In the U.K., Bacardi rum has been doing a lot of work with Gravity Road, working with Jamie Oliver's YouTube cocktail channel, Drinks Tube.

The agency consolidation comes as Bacardi is in the midst of a cost-cutting effort as it deals with sluggish sales trends. Cutbacks have included laying off about 10% of its North American staff, as first reported in April by The Wall Street Journal.

The company is also being led by a relatively new management team. Michael Dolan, the former CEO of IMG Worldwide, earlier this year was named permanent CEO after serving as interim CEO since early 2014. In January, Bacardi named Mr. Ivanov as its new chief marketing officer. He was previously VP-global category director for rums.

Mr. Dolan, in a statement, said the goal of the agency consolidation is to "work better and to create a closer alignment between our global and local operations." He said that this "requires that we work with a global network." BBDO and OMD have "a proven ability to deliver against similar goals for other multinational clients" he said, adding that "this new global partnership will be a great catalyst for achieving top-line growth."

Cost efficiencies were a consideration, but not the "primary driver" of the agency consolidation, said Mr. Ivanov, who was recently named to Ad Age's "40 under 40" list. "It's more about the effectiveness and reaching the proper rigor and discipline and quality in how we deliver the brands in the marketplace," he said.

Andrew Robertson, president-CEO of BBDO Worldwide, said the agency was invited to a secret meeting about a month ago with senior Bacardi leaders. "We had a great conversation and we very quickly put a proposal together," he said.

BBDO and OMD will handle the business from two global hubs in New York and London, said Mainardo de Nardis, CEO of OMD Worldwide. "These are big global brands which need big global strategies to be … executed at the local level," he said.

BBDO's alcohol client list already includes Guinness, Bud Light and Belvedere vodka. Because Belvedere competes directly with Bacardi (Grey Goose), BBDO plans to resign that account, Mr. Robertson said.

Under BETC, Bacardi rum launched a campaign called "Untameable Since 1862" which plays up the heritage of the company and the Bacardi family. But sales have sagged. In the U.S. Bacardi was down 2.5% last year to 8.8 million cases, according to liquor trade publication Shanken News Daily.

Mr. Ivanov said Bacardi remains confident in the "Untameable" strategy. "We just need to start executing it everywhere consistently and with the proper pace," he said.

Grey Goose, another key brand, appears to be faring better. Sales grew 3.4% in the U.S. to $83 million in the 52 weeks ending Jan. 25, according to IRI, which does not include sales at bars. But those results still lagged total vodka category growth of 3.8%, according to IRI.

Bacardi in March announced a move into the bourbon category with the acquisition of Louisville-based Angel's Share Brands and its Angel's Envy bourbon. "We have a clear strategy aligned to meet consumer needs in premium spirits and are building an even stronger portfolio through innovation and acquisition," Mr. Dolan said at the time.

Contributing: Emma Hall

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