Panera CMO: Cramer-Krasselt Didn't Fire Us

Chain Said it Told Agency it Would Hold a Review; Shop Elected Not to Participate

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Panera Bread Chief Marketing Officer Michael Simon said today that its creative agency Cramer-Krasselt did not quit the marketer, as the agency's leaked internal memo seemed to indicate.

"Cramer-Krasselt did not fire us," he said. Rather, he said that the chain had been pushing the agency to bring the advertising to the next level over the last couple months because Panera has been tweaking its marketing strategy due to softening sales. "We weren't performing at the levels we wanted," he said. Mr. Simon said that Cramer-Krasselt had been producing some new work, but that while the ads were good, they weren't breakthrough enough.

"We told them we were going to open it up for review, and they decided not to participate," said Mr. Simon. Panera has since launched the review and reached out to about eight agencies, said Mr. Simon, who declined to name the participants.

He added that no request-for-proposal had been issued as of yet and that the next step is to hold chemistry meetings, followed by an assignment for some of the shops. The review will be led internally, and is expected to go on for about six or seven weeks, he said. The process does not affect Panera's media agency, WPP's Maxus.

Cramer-Krasselt did not offer further comment.

The agency on Wednesday morning sent an internal memo to employees announcing that "we are resigning Panera Bread." Chairman-CEO Peter Krivkovich's note painted the agency-client relationship with Panera as dysfunctional, but the memo made no mention that its client was staging a full review and that it had been asked to participate.

"Panera Bread is a wonderful brand," said Mr. Krivkovich in the memo. "They truly deliver on their food sourcing and quality promise. Unfortunately, how that's conveyed is an ever-changing target within their organization without consistent internal alignment. In that environment of inconsistency, it's very difficult to build a long-term differentiating brand image and break category norms—things we have a reputation for doing so well."

"We had a good relationship with the team [at Cramer-Krasselt]. And the work was good, but we were aspiring for great," said Mr. Simon. "We told them we wanted to get more folks in the room and solicit new ideas from them...but incumbent agencies get reticent about bringing in new agencies."

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