Element 79 Loses Another Piece of PepsiCo Business

$120 Million Quaker Oats Account Goes Into Review, Effectively Ending Relationship

By Jeremy Mullman

Published: September 11, 2008

CHICAGO (AdAge.com) — Omnicom Group’s Element 79 has lost the $120 million Quaker Oats account, believed to be the last piece of PepsiCo business housed at the agency. Earlier this year, Gatorade, Tostitos, Lays, Tropicana and Propel all departed the shop; including Quaker, the value of the combined accounts is estimated at $440 million. 

A Quaker spokeswoman said the account was placed into a review, and that Element 79 was not invited to participate. She said the pitch for the business would involve sibling Omnicom shops already on Pepsi’s agency roster. 

Sibling rivalry 
That’s a familiar and painful theme for Element 79, which earlier this year lost Gatorade to TBWA/Chiat/Day, Propel to Goodby, Silverstein & Partners, Tropicana to Arnell Group and Lay’s to BBDO’s Juniper Park. 

“We’re looking for the best creative and it’s always difficult to part with partners but the overall the brand team is very excited about the potential for what new creative can bring to the business,” the spokeswoman said. 

The Quaker account includes not only the famous oatmeal and cereal bars, but also grocery staple brands such as Near East, Rice-a-Roni, Life cereal and Cap’n Crunch. 

Those losses have sparked speculation over whether Chicago-based Element 79, founded in 2002 primarily to handle Gatorade and Quaker, can remain a viable independent agency. The shop’s remaining clients include Alberto Culver, ConAgra Foods, Harris Bank, Supercuts, Celebrity Cruises and American Family Insurance. The agency also has a sports unit whose clients include the LPGA and Discover Card. 

Dismissing rumors
After Gatorade and Tropicana departed, Element 79 CEO Brian Williams dismissed talk that the agency was considering folding itself into its neighbor and sibling DDB, Chicago, with which it already shares some back-office functions, as “unequivocally false.” 

Call to Mr. Williams and an Element 79 spokeswoman were not immediately returned. 

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Contributing: Emily York, Rupal Parekh