Kellogg's Kashi Changes Strategy, Launches Agency Review

The Struggling Brand Goes Into Review Along With Bear Naked

By Published on .

Credit: Kashi

Kellogg Co. is reviewing ad agencies for its Kashi and Bear Naked brands as the food giant charts a marketing course aimed at seizing on the natural-foods craze. Part of the strategy involves creating a Kashi division that includes Bear Naked and is structured to operate autonomously from Kellogg's other brands.

"As Kashi Co. is re-established as a stand-alone company, we see an opportunity to review our agency partnerships to advance our communications and ensure we have the right agency model to engage with our consumers effectively," the company said in a statement, confirming the review. "Kashi has invited all of our existing agencies and some new agencies to participate in the RFP process."

The incumbent agency for Kashi is Amazon Advertising, a San Francisco shop that is part of the Leo Burnett Worldwide network. The Leo Burnett agency, which handles a majority of other Kellogg brands, did some recent work for Kashi, but it was on an "interim, transitional" basis, according to a Kellogg spokesman. The Amazon ad agency declined to comment.

The account has an estimated worth of $15 million to $30 million, including media, according to a request-for-proposal document obtained by Ad Age. Last year, Kellogg spent $9 million in measured measured media on Kashi and $42,200 on Bear Naked, according to Kantar Media.

The once high-flying Kashi brand has been stuck in a sales slump of late. The brand's cereal sales in the U.S. fell from $382 million in 2013 to $351 million last year, while its breakfast bar sales dropped from $32 million to $22 million, according to Euromonitor International.

Pushing smaller brands is a key part of the strategies for many big food companies as they seek to remain relevant as more consumers shun big processed-food brands. But Kellogg executives in recent months have acknowledged that Kashi lost its way by not focusing enough on "progressive nutrition."

The RFP notes that while Kashi has "historically been a leader in the natural foods industry, the brand has lost traction in recent years with its core consumers." The decline was the result of a "stale innovation model, a lack of purposeful brand positioning and a communications model that hasn't evolved to keep up with the changing use and consumption of media," according to the document.

The new approach should "re-establish our identity in the natural foods movement by offering plant-based foods as a solution to people and planet health," according to the RFP. In a move to re-establish its West Coast roots, the newly formed Kashi group recently relocated from Kellogg's corporate headquarters in Battle Creek, Mich., back to La Jolla, Ca., where Kashi was based as recently as 2013. Kellogg acquired the Kashi brand in 2000.

Bear Naked, whose products include granola and bars, appears to be faring better. The brand posted sales of $76 million in the cereal category last year, up from $71 million the year before, according to Euromonitor.

On an earnings call this week, Kellogg CEO John Bryant suggested that the company's playbook for Bear Naked and Kashi would include "stronger marketing plans using more of a storytelling model rather than a traditional advertising model."

Most Popular
In this article: