Kraft Heinz Is Reducing Its Agencies by Half

The company also plans to increase its media budget by 30% with a focus on its most popular brands

Baby Nut cut in two
The company that gave us Baby Nut plans to consolidate its creative and design agencies from 36 to 19. Photo Illustration: Dianna McDougall; Sources: Planters, Getty Images
Headshot of Paul Hiebert

In hopes of turning business around, this year Kraft Heinz plans to cut the number of agencies it works with in half, while boosting its consumer-facing marketing efforts by 30%, CEO Miguel Patricio told analysts in a recent earnings call.

“I think it’s appropriate to start today’s update by recognizing that 2019 was a very difficult year for Kraft Heinz, for our employees, our board and our stakeholders,” Patricio said during the call, noting that in 2020 the company would redirect more dollars toward flagship brands, while reducing money spent on innovation and introducing new products.

In a slide shown during the company’s earnings presentation, a graphic showed that Kraft Heinz would consolidate its creative and design agencies from 36 to 19. The company did not name specific agencies.

When asked to elaborate on the strategy, a Kraft Heinz spokesperson told Adweek, “We’re taking a fresh look and evaluating creative and design agencies,” but declined to comment further.

The announcement came as Kraft Heinz, which owns food brands like Oscar Mayer, Planters and Jell-O, reported $6.5 billion in quarterly sales, down 5% compared to the same period the year prior.

Company shares fell 8% following yesterday’s news, and have continued to decline today. Since early 2017, the company’s share price has decreased around 70%. Fitch Ratings downgraded Kraft Heinz from BBB- to BB+, the credit rating firm said on Friday.

Kraft Heinz also lowered the value of its Maxwell House brand by approximately $213 million.

This news comes just weeks after Kraft Heinz made a significant marketing push around its Planters brand during the Super Bowl. The campaign focused on the death (and rebirth) of Mr. Peanut, the 104-year-old Planters mascot, and was created by VaynerMedia. Kraft-Heinz also ran a spot for its Heinz brand, created by Wieden+Kennedy New York.


@hiebertpaul paul.hiebert@adweek.com Paul Hiebert is a CPG reporter at Adweek, where he focuses on data-driven stories that help illustrate changes in consumer behavior and sentiment.
Publish date: February 14, 2020 https://stage.adweek.com/brand-marketing/kraft-heinz-is-reducing-its-agencies-by-half/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT
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