Dive Brief:

• KFC will part with U.S. ad agency Wieden + Kennedy when its contract expires in January, per a report by Business Insider. The Portland agency has handled the QSR's creative and ad-buying since 2015 and 2018, respectively.
• Havas' Arnold, IPG's FCB and MullenLowe, WPP affiliate Johannes Leonardo and independent agency FIG are competing for the creative business, while WPP's Wavemaker, Publicis' Spark Foundry and IPG's UM are finalists for the ad-buying business, sources told Business Insider.
• The news of KFC's shakeup of its marketing partners comes days after announcing that Nick Chavez, formerly of Nintendo of America, will be the chain's new CMO, but it is unclear what motivated the decision. The account is reportedly worth more than $20 million in annual agency revenue and was put up for review in September.

Dive Insight:

KFC changing its creative and media agencies would be a loss for Wieden + Kennedy but a boon for agency holding companies including WPP, IPG and Publicis that are finalists for the business.

It is unclear what is motivating the move. KFC's same-store sales are up 13% on a two-year basis, and its digital sales year-to-date in July exceeded those for all of 2020, per its latest earnings report. In addition, KFC praised Wieden + Kennedy's work as the kind of campaigns they want from their next agency, sources told Business Insider. However, KFC is reportedly looking to attract younger consumers as its average consumer age increases and the chain falls behind competitors Popeye's and Chick-fil-A in the "chicken sandwich wars."

This could also be part of the thinking behind hiring Nick Chavez, formerly senior vice president of sales, marketing and communications at Nintendo of America, as U.S. CMO. Gaming continues to be an area of interest for QSR and CPG brands looking to reach younger consumers, and KFC has dabbled in the space previously. In a related move to attract younger cohorts, fellow Yum Brands marketer Taco Bell selected Cashmere as its culture agency of record in August.

KFC is expected to name new agencies in December, per the report. It first put the account up for review in September, noting that while Wieden + Kennedy is "a valuable part" of its turnaround, it is looking for the right partners to continue the brand's growth. Previously, U.S. CMO Andrea Zahumensky left the brand, which she helped position around edgy, off-the-wall humor and marketing activations.