Kraft Heinz Reviews Creative Accounts

Review Is a Cost-Cutting Measure; Shops May Not Handle Production

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Kraft Heinz has begun reviewing its creative accounts, Ad Age has learned.

According to people familiar with the review, the move is a cost-cutting measure in the wake of the Kraft Heinz merger that was finalized in July. These people said that during the procurement-led process, creative agencies received a request for information and have been informed that winners will be responsible for creative ideas. They will, however, no longer be handling the production of the work, which will be outsourced to production houses. It wasn't immediately clear how much production the agencies previously handled, but the move indicates creative agencies will have less oversight over the process once they get a creative idea approved. It's believed that incumbent agencies are involved.

Last november, Kraft consolidated its creative agency roster with four main agencies: McGarryBowen, Leo Burnett, Taxi and CP&B. Heinz shops include Cramer-Krasselt and David, which did a big campaign for Heinz mustard earlier this year. Agencies either declined to comment or couldn't be immediately reached.

A Kraft Heinz spokesman declined to comment.

Kraft Heinz was formed in July, when H.J. Heinz bought the former Kraft Foods Group Co. The merger was orchestrated by 3G Capital and Warren Buffett's Berkshire Hathaway, which according to the original announcement were seeking to squeeze out $1.5 billion in annual cost savings by the end of 2017.

In the leadup to the merger being finalized, the company announced that there wouldn't be a chief marketing officer and that the senior leadership team would be dominated by current Heinz executives. The top marketing person for the company is Nina Barton, a legacy Kraft employee who was promoted to senior VP-marketing innovation, research and development at the combined company.

In the wake of the merger, the company went through a number of changes, including the elimination of several top marketing executive positions. Those cuts included senior level marketing positions that were responsible for shaping marketing and agency relationships. A month after culling the marketing department, the company announced it would lay off 2,500 people across the U.S. and Canada.

In August, the company consolidated its media planning and buying in the U.S. with Publicis Groupe's Starcom, the incumbent for the former Kraft Foods, in August. Heinz brands' U.S. media had been at Interpublic's UM.

--Contributing: E.J. Schultz, Jessica Wohl

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