Dive Brief:
- Starbucks has handed U.S. creative duties to WPP, which is forming a bespoke unit to work on the coffee chain’s business, Ad Age reported.
- The freshly created Team Starbucks draws on talent from WPP shops Ogilvy, VML and Landor. FCB, Anomaly and incumbent Spcshp, formerly Big Spaceship, participated in the pitch while the review process was led by Joanne Davis Consulting.
- The agency change comes as Starbucks welcomes new leadership and fights for a turnaround. The company is also cutting back on promotional deals and discounts as it tries to reestablish a premium brand positioning.
Dive Insight:
A creative agency of record switch-up adds to a series of changes at Starbucks that aim to reverse a sales slump and solve an identity crisis for the Frappuccino purveyor. Rather than select a single agency partner to spearhead its U.S. creative business, the coffee giant is enlisting a bespoke unit from WPP that brings together several shops under the network. Those include the recently formed VML, which is the result of a combination of Wunderman Thompson and VMLY&R from the start of the year. VML leadership has previously called out strong demand in areas like loyalty and customer relationship management, important areas in the restaurant category.
Starbucks in August experienced a shakeup in its top ranks as former chief executive Laxman Narasimhan was fired and replaced by Chipotle CEO Brian Niccol. Niccol quickly reversed some of Narasimhan’s initiatives. Starbucks North America CEO Michael Conway, who landed in the role in April as part of a prior focus on regional leadership appointments, will retire at the end of November, and his spot will not be backfilled. The company remains on the hunt for a global chief brand officer to oversee areas including marketing, creative, product and digital initiatives, sister publication Restaurant Dive previously reported.
Niccol has outlined four strategic initiatives as he looks to revitalize Starbucks: refocusing on the morning daypart; returning to the chain’s roots as a community coffeehouse; regaining control over the brand’s narrative; and improving the situation for workers, including installing more career advancements opportunities.
Starbucks’ reputation as a “third place” for hanging out and working has waned due to store redesigns and a focus on mobile ordering, a channel that has grown sales but led to logjams and employee frustrations. Niccol has also called out an overwhelming menu and begun to pull back on promotional offers available through the Starbucks app to return to a premium positioning and reduce the stress of order surges on workers, according to media reports. These pivots come ahead of the holiday season, when Starbucks frequently markets seasonal beverages and festive cups.
That is all to say that WPP’s Team Starbucks has a tall order to fill, but also a major opportunity to return an iconic brand to its former glory. Meanwhile, the network’s creative segment has been trying to break out of its own funk. Integrated creative agencies declined 2.4% in Q2, offsetting gains for media-buying arm GroupM. WPP reports its Q3 results on Oct. 23.
