Danone has consolidated its global media account with WPP’s Wavemaker after a competitive review.
The consumer goods giant, which owns dairy, plant-based and water brands, such as Alpro, Actimel, Evian and Volvic, recently admitted to investors that it has been “under-investing” in advertising and vowed to increase its investment by an extra €300 million (about £250 million) in “brand support” over the next 24 months.
Wavemaker already handled media for Danone in some key markets including the US and Europe and several other global agency groups were also incumbents.
It is understood that the WPP agency added digital duties in Europe, the Middle East and Africa and won media duties in other key regions including south-east Asia and Latin America. However, China was not part of the review.
The decision to consolidate its media is part of a wider shake-up at French-owned Danone.
In an unusually frank presentation to investors in March, the company told analysts it was operating in “healthy, on-trend and growing categories” and yet “we have underperformed our categories and peers” since before the pandemic.
Danone said it reduced its advertising and promotion (A&P) spend by 20% between 2017 and 2021 and cited numbers that showed it had a negative effect on its share in key markets such as France and the UK.
Antoine de Saint-Affrique, the chief executive of Danone since September 2021, said: “We have been for years structurally under-investing behind our brands.”
The company needs “consistent” investment in its brands, including in its central brand marketing team, and a broader cultural “reset” to drive growth and innovation, according to de Saint-Affrique.
Juergen Esser, chief financial, technology and data officer, explained the business case to “reinvest” €300 million in A&P in the next two years.
“We have been underfunding our brands, running on too little A&P,” he said. “We will make sure that our brands get at least their fair share of voice.
“We will create the visibility our brands deserve to communicate on their superiority and differentiation. Our investments in that area will enable us to catch up, to become again competitive in the marketplace.”
While its A&P spend was flat in 2021, putting “more media” behind some brands led to growth and share gains, the company noted.
Danone did not respond to an invitation for comment about its media review. Wavemaker declined to comment.
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