Publicis snags CIBC account

Score another one for Publicis Canada of Toronto. Barely a month after landing the $30-million Microsoft Canada account, the agency has reeled in another choice piece of business: the AOR assignment for CIBC, which represents annualized billings of $50 million-plus....

Score another one for Publicis Canada of Toronto. Barely a month after landing the $30-million Microsoft Canada account, the agency has reeled in another choice piece of business: the AOR assignment for CIBC, which represents annualized billings of $50 million-plus.

Palmer Jarvis DDB was runner-up in the review process, which was overseen by Westport Consulting Group of Westport, Conn.

Serge Rancourt, president of Publicis Canada, says the CIBC and Microsoft wins represent a real turning point for the agency, which is on a mission to raise its stature in the marketplace.

Publicis has been hampered by the perception that it is essentially a Montreal agency, says Rancourt, who came on board last summer. Recent events, however, should help change that.

"When I came here in August, people couldn’t even pronounce the name Publicis," he says. "I think now they realize that Publicis is an entity in Toronto – a serious one with large clients."

Andrew Bruce, executive vice-president and COO of Publicis, says the agency is "thrilled" to be working with CIBC.

"They have a strong commitment internally to make changes that will lead them to a new place," he says. "That’s exciting to us, to [work with a client] that is undergoing change in the way it’s going to operate and communicate."

Publicis had already begun staffing up in the wake of the Microsoft win. In all, the agency will be adding approximately 50 new staff people across all departments, including account service, planning, creative and the media division, Optimedia Canada.

The hand-over of the business from seven-year incumbent Padulo Integrated is expected to begin in June.

Kraft Heinz beats the street, but reports slight sales slide

The company's Q2 net sales, while down slightly, reveal continued demand for snacks and pre-packaged meals.
Kraft Heinz

Kraft Heinz is reporting earnings of 78 cents a share, beating Wall Street’s estimate of 72 cents a share, thanks to continued demand for snacks and pre-packaged meals. However, the company also reported a net sales decline of 0.5% compared with the same period last year, to $6.6 billion, according to its latest Q2 earnings report, released Tuesday.

The company experienced a favourable 2.3 percentage point impact from currency and a negative 0.7 percentage point impact from its February divestiture of Hormel Foods – including the Planters peanut brand – which closed in the second quarter of 2021.

Its cheese divestiture – which included the sale of its natural cheese division to Lactalis – is expected to close in the second half of 2021, says Kraft Heinz Global CEO Miguel Patricio in this morning’s conference call.

Adjusted EBITDA slumped 5.2% versus the year-ago period to $1.7 billion and increased 6.6% versus the comparable 2019 period. Higher transportation and inflation-related goods costs continue to affect the company’s bottom line.

Kraft Heinz’ organic net sales declined 3.6% in Canada over the last three months compared with a comparable period last year, this as total net sales rose 8.8% year over year. 

However, its overall organic net sales slipped 2.1% compared with 2020 figures. This includes the negative impact stemming from exiting its McCafé licensing agreement. However, this decline was partly offset, Kraft Heinz reports, by “partial recovery in foodservice channels and retail consumption trends.”

“Food service is recovering, and recovering fast,” Patricio stressed in today’s earnings call. He said “the bet to support QSR” early in the pandemic, with individual packets of ketchups and sauces, is paying off.

Channel trends are still normalizing, he warns, and it’s too early to see how at home or away from home, will net out. “We have big ambitions for away from home business,” he said. Consumers continue to evolve how they eat, with Patricio saying that Kraft Heinz is collaborating with a popular DTC brand for its Philadelphia cream cheese.

Accrued marketing costs, the company reports, rose to $968 million from $946 million in December 2020.

“We are investing more in our brands, and better as well, building a much more creative company,” Patricio reported.

Kraft Heinz is also strengthening and diversifying its media presence, he said, driving repeat rates for those discovering and rediscovering the brand. Patricio added that the company is continuing to drive its transformation program forward, modernizing its brands and better connecting with its consumers.