Keebler Deal Fortifies Kellogg
Tony the Tiger is getting an assist from Ernie and the Elves. Kellogg Co., Battle Creek, MI, gets at least two marketing boosts by acquiring Keebler Co., Elmhurst, IL, for $3.86 billion. First, Keebler’s direct-store delivery system is a key asset that could help Kellogg grow its convenience-foods business. Second, Keebler’s distribution and in-store merchandising expertise may enhance Kellogg’s marketing skill, which is honed on media advertising.
Battle Creek, MI-based Kellogg plans to refocus on the U.S. and a handful of markets abroad, and pump up marketing spending to regain the ground it has lost over the last two years.
The company’s push this year to improve promotions with higher-quality premiums, Pokemon and Grinch tie-ins, and the Eetandern.com online/on-pack loyalty program has yet to pay off: Sales were down 5.2 percent to $2.3 billion for the 52 weeks ended Sept. 10, while arch-rival General Mills’s tally was up 0.4 percent to $2.48 billion, per Information Resources, Inc., Chicago. Keebler cracker sales rose 7.2 percent to $531 million in the period, while cookie sales rose 1.3 percent to $648 million, per IRI.
Keebler gives Kellogg entree to faster-growing categories, opens new-product and cross-branding opportunities, and maximizes Kellogg’s extensive marketing research. Keebler ceo Sam Reed and president-Keebler brands David Vermylen will join Kellogg, which will keep shopping as ceo Carlos Gutierrez looks for aggressive growth in what he calls “the renewal” of the company.
The two companies already have the same ad agency, Leo Burnett USA, Chicago. DraftWorldwide, Chicago, is lead promo agency for Kellogg, which also has Brigandi & Associates, Garner & Nevins, Clarion Marketing, Noble & Associates, and The Marketing Department in the stable. Keebler has worked recently with a variety of shops including Luna Bacardi Group, Chancellor Marketing, Marketing Store Worldwide, Gage Marketing Group, Grand Group, and Communicator.
Transora, Chicago, an e-marketplace formed earlier this year by 50 packaged goods companies, established alliances with Novopoint, Chicago, and Foodtrader.com, Miami, FL, to broaden Internet-based contact between manufacturers, suppliers, and retailers. Transora will be the hub between food supplier marketplace Novopoint and retailer-focused Foodtrader.com.
Minneapolis-based General Mills announced a multi-year partnership with America Online, Vienna, VA, to develop “a variety of consumer promotions and innovative cross-marketing campaigns,” according to a statement. The partners are already developing an online/offline sweeps effort tied to Chex Party Mix and Chex Cereal.
Los Gatos, CA-based online brand management consultant Magnifi, Inc. and Wilton, CT-based online marketing research company Greenfield Online formed a strategic alliance to provide Magnifi’s subscribers with access to Greenfield’s research services and survey tools.
Basking Ridge, NJ-based Lightspeed Research.com and New York City-based Geppetto Group formed an alliance to offer quantitative online research for the kids and teens marketing segments. O
PEPSI SWALLOWS THE LIZARD Pepsi-Cola Co., Somers, NY, announced plans to acquire drink maker South Beach Beverage Co., Norwalk, CT. The deal gives Pepsi one of the fastest-growing beverage companies in the U.S. and an established brand through which to penetrate the alternative beverage category. SoBe gets a parent with deep pockets. No word on whether Pepsi agency TLP, Inc., will get a crack at SoBe, which does most of its work in-house.
SCA MUSCLES ONLINE Promotional consultant and prize guarantor SCA Promotions, Dallas, acquired eIncentives, St. Louis, an online promotion and incentive program operator. The deal inolves both cash and stock. Sales at eIncentives are projected to reach $20 million in 2000, based on demand for its eSpinners and ePredicts online spin-and-win sweeps/contest offerings.
SOME EXTRA PERKS Marketing Services Group, New York City, last month struck a deal to buy 80 percent of loyalty program operator Perks.com, Los Angeles. The two-year-old company’s clients include Sony and Infiniti Motors. MSG’s client roster includes American Express and The Walt Disney Co.
BLENDING IDENTITY Kansas City, MO-based IdentityNow will merge its largest division, American Identity, with Maumee, OH-based Boise Marketing Services to create the largest privately held promotional products distributor in the U.S. (based on sales figures reported in The Counselor). Boise Marketing Services is the promotional merchandise subsidiary of office supply company Boise Cascade Office Products, which will hold an equity stake in IdentityNow.
CAUGHT IN THE INTER-ACT St. Petersburg, FL-based Catalina Marketing Corp. acquired the patent portfolio of InterAct Electronic Marketing as well as the Deaton “Echo” patent portfolio from Incentech, Abiline, TX. Point-of-sale specialist Catalina gains control over InterAct’s 12 U.S. patents and three pending patents, as well as Incentech’s four patents and four pending applications.
