Mullen Splits With Panera Over Creative Differences

Boston-Based Agency Worked With Restaurant Chain for Six Years

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Mullen and client Panera Bread Co. are parting ways amid what the agency calls creative differences.

The Boston-based agency has worked with the chain for six years and in that time, the restaurant chain has had three different CMOs. The most recent, Michael Simon, is a former Campbell's Soup Co. and Ralston Purina marketer. A review to replace Mullen seems likely to be in the offing, people familiar with the matter said.

The creative agency change doesn't appear to affect WPP's Maxus, Panera's media-buying agency. At inception of the relationship, Mullen handled both creative and media duties, but the company split the business into two separate accounts in 2009.

"We believe that Panera is 'belief brand' -- one of those brands that stand for something," Alex Leikikh, president of Mullen, told Ad Age . "They're nice people, have a great product and have had phenomenal growth."

But according to Mr. Leikikh, there were increasing clashes with the company creatively, with Mullen saying the work it felt would help elevate the brand wasn't agreed upon by the client. "We were never able to get it through and sell it," he said. "At a time when we felt like we could have been doing the best work we could have for them, it felt like a good time to separate."

Asked about replacing business in the restaurant category, Mr. Leikikh said: "We had numerous calls that came in every year for which Panera posed a conflict, and now we are conflict-free." The shop's other clients include Google, Zappos and JetBlue.

St. Louis-based Panera is performing well particularly for the fast-casual-restaurant segment. In October, the chain reported a 29% year-over-year increase in diluted earnings per share and net income of $29 million for the third quarter of 2011 compared with the prior-year period.

That spike in profits has been in step with a steady increase in the company's marketing budget (it spends $35 million to $40 million in measured media annually, according to Kantar) and ad presence. This summer, Panera launched its biggest TV push to date, with Mullen leading a campaign called "Make Today Better" that touted the restaurant as a place with soul, serving fresh bread and using real silverware instead of cheap plastic.

"We certainly respect Mullen and their work," said a Panera spokeswoman. "It was just time for a change."

Panera said it has not finalized plans for replacing Mullen but is "considering next steps."

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