PM creates food giant by acquiring Nabisco
Philip Morris Cos. agreed to acquire Nabisco Holdings, the food operation of Nabisco Group Holdings, for $55 a share, adding the company's snack, candy and condiment brands to its own Kraft Foods to create a $34.9 billion food behemoth. R.J. Reynolds Tobacco Co. agreed to purchase Nabisco Group Holdings for $30 per share. The merger of the major food giants is intended to further leverage the scale of Kraft Foods, which with the addition of Nabisco brands such as Oreo, Ritz and Planters will build its share of the growing snack category from 6% to 20%, said Geoffrey Bible, chairman-CEO of Philip Morris. The goal to combine the now distinct brand portfolios through line extensions, cross-merchandising and promotions will likely bring a bump in marketing. Kraft, currently reviewing both the way it compensates its agencies and its media agency roster, spent $759 million on measured media in 1999, per Competitive Media Reporting. Its agencies include FCB Worldwide, J. Walter Thompson USA and Leo Burnett USA in Chicago and Y&R Advertising and Ogilvy & Mather in New York. Nabisco, which spent $187 million on media in 1999, splits its agency work among JWT, Chicago; FCB, New York; and North Castle Partners, Stamford, Conn.
Estee Lauder enlists creative boutique A&R
Estee Lauder Cos. hired A&R Media, New York, to take on some creative duties for its flagship Estee Lauder brand; the work previously was handled in-house. A&R, a 4-year-old creative boutique, will collaborate with Lauder's creative department on a campaign that will break in January. Lauder will retain actress Elizabeth Hurley as the "face" of the brand, and Bates USA will continue to handle media for the account. Lauder executives wouldn't disclose the budget, but the company spent $64.4 million in U.S. media on Estee Lauder in 1999, according to Competitive Media Reporting.
Levi Strauss' new ads: `Make them your own'
Levi Strauss & Co., hoping to refashion its marketing image as well as its financials, this fall breaks a new umbrella campaign tagged "Make them your own." The advertising from TBWA/Chiat/Day, San Francisco, will push the troubled clothing marketer's basic jeans products and will evolve into support for corduroy products. In major spot markets, the "Make them your own" campaign will be augmented with a second effort for Engineered Jeans (AA, April 17). Levi Strauss last year spent $72 million on advertising, according to Competitive Media Reporting, much of it backing the abandoned "Opt. For the original" campaign.
ADM gives True North $40 mil global account
Archer Daniels Midland Co. named FCB Worldwide, Chicago, and other True North Communications agencies to head its $30 million to $40 million account. The June 27 announcement came one day after a federal appeals court told a judge to increase the two-year sentence for two ADM executives convicted in a lysine price-fixing scam. Other contenders for the global consumer, business-to-business and direct marketing account were D'Arcy Masius Benton & Bowles, Troy, Mich.; DCA, New York; DDB Worldwide, Chicago; and Ross Advertising, Peoria, Ill. TN's BSMG Worldwide, Chicago, will lead the public relations effort. ADM's agency of record had been Jones & Thomas, Decatur, Ill., but Ross had done project work.
Tobacco marketing jumps; cigars to use warnings
The Federal Trade Commission noted last week that spending on tobacco marketing has been surging, and separately it has gotten cigar marketers to start putting health warnings on ads and packaging:
nTobacco marketing spending jumped nearly 19% to $6.7 billion in 1998, according to the FTC's latest report on tobacco advertising. The biggest increase was in value-added retail promotions, jumping 60% to $1.6 billion. Slotting, or promotional, allowances continued to be by far the biggest single expenditure by tobacco marketers, with the figure reaching $2.9 billion, up 18%. The FTC's figures show magazine spending by tobacco companies shrinking, while newspaper spending increased.
nThe FTC and Surgeon General David Satcher on June 26 joined California Attorney General Bill Lockyer in announcing that seven major cigarmakers, selling 95% of the cigars in the U.S., agreed to start putting health warnings on their products and ads. The new warnings are similar to cigarette warnings, but on packaging will be slightly larger and more prominent. One of the cigar warnings refers to second-hand smoke. The FTC said the agreement settled FTC charges that sales of the products without health claims were "deceptive" and "unfair." Signing the agreement are Consolidated Cigar, General Cigar Holdings, Havatampa, Swisher International, Lane Ltd., John Middleton and Swedish Match North America.
Also . . .
Bombardier to Cramer-Krasselt, Milwaukee, for its estimated $10 million Ski-Doo account. Cramer teamed up with Cosette Advertising, Montreal, to win the account. Incumbent Ogilvy & Mather, Dearborn, Mich., parted amicably and didn't participate in the review. . . . True North Communications, Chicago, acquired Event Management & Promotions, Santa Monica, Calif. The agency will become part of True North's Marketing Drive Worldwide. True North said the acquisition enhances its ability to deliver promotional event marketing capabilities around the world. EMP founder and President Jamie Wark will continue to lead the 11-year-old company.