Supply chief leads review for Danone

Danone's supply chain purchasing director Terence Tiew confirmed he was "driving the whole project" to achieve "synergy of volume purchasing". Sources said Danone was looking to consolidate the two accounts to achieve its goal. Danone's biscuit buying and planning brief is split between ZenithMedia and Starcom, based on geography, while Optimedia handles planning for Robust out of Guangzhou. It is understood that Zenith and Starcom are defending their briefs, pitching against OMD. David Liu, Aegis Media's CEO for Asia-Pacific, told Media that Carat, a rostered agency for Danone in Europe, had to decline the pitch invitation because of its Kangshifu brief. Said a source: "This is essentially a review to explore the additional media cost efficiencies that can be generated through consolidating buying across Danone-owned companies in China." Another source added: "It appears Danone is evaluating the buying power of different agencies against its in-house team (which handles buying for Robust) because it structured the pitch by asking agencies, 'show us your discounts; tell us your lowest price'." While some have pegged the account at close to Rmb 400 million (US$48 million), rising to Rmb 700 million if the Wahaha soft drinks assignment is included, spending tracked by Nielsen Media Research for the first six months of this year placed the brief at Rmb 190 million, which is however, 81 per cent up on 2003 spend levels. Sources claim agencies were only given 10 days to prepare for the first round of the pitch, which took place in mid-September in Shanghai. The second round was slated to take place on September 22 in Guangzhou, where the Robust team is based.