Fonterra to consolidate agency roster

By Rosie Baker | 19 May 2014
Kiril Simonovski

Fonterra, the dairy firm that owns brands including Bega, Ski and Western Star, is looking to consolidate its agency roster following a restructure of its marketing division. Its marketing director said the full roster has gotten “out of control” in recent times and it needs to refocus and bring certain capabilities in-house.

Kiril Simonovski, who joined from Heinz at the tail end of 2013, restructured the marketing team and is getting the firm’s house in order after the marketing director’s seat had been empty for seven months.

As part of the restructure Simonovski aims to bring a lot of capability back in-house that had slipped to external partners and consolidate the number of agency partners it uses.

“Across the board we’re probably using too many, with 10% of our agencies generating 80% of our spend,” he said. “We have to work out what we need but my experience in this space is that you need to create the right roster for the broader team to get the most out of. We’ve probably let it get too broad and out of control and we’re not leveraging the synergies.”

It started with media. Fonterra appointed MediaCom to handle its account in February, having previously worked with OMD. The review was on an APAC level, and while Simonovski said there was no pressure to align globally, regionally he said it was a good time to have a new media partner as it was entering a phase of change.

"Our OMD relationship was succesful, and there was no pressure globally to align," he said. "I think was a great opportunity to review the media provider at a point in time where we're looking to change our approach internally."

Clemenger BBDO and Cummins&Partners are the dairy firm’s lead creative agencies and it is working with both on some “significant challenges” across its brand portfolio. Fonterra is not reviewing creative agencies officially but Simonovski didn’t rule it out down the line.

Head count has gone up marginally in marketing, but the “shape and quality” of the team is different. Simonovski has put in place commercial marketing heads across each core category to provide better thought and commercial leadership and tap into the firm’s global agenda. A new head of marketing services role was also created to oversee consumer insight and drive new product development. The insights resource was also doubled so that the team can keep pace with consumers.

“We almost default to agencies to lead our category portfolios and that’s what we get paid to do [internally],” Simonovski said. “Of course we want to leverage external capability in areas we don’t have competence in, but the new philosophy is we need to drive this business and we need to do it in partnership with key partners – not absolve ourself of the responsibility.”

This story was originally published in the 16 May print issue of AdNews. It's also available as an iPad version.

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