Burger King Consolidates Promotional Work at Premium Surge

Burger King is parting ways with EMAK Worldwide’s Equity Marketing, its promotional products manufacturing agency of record. The work is being picked up by Premium Surge Promotions, which had shared the work with Equity Marketing for more than seven years.

Equity Marketing had supplied Burger King with toy premiums for its Kids Meals and other promotions for about 24 years.

Burger King enticed customers to its Kids Meals this summer with eight "G.I. Joe: The Rise of Cobra" toy premiums inspired by the film.

EMAK said that the partnership would end after the second quarter of 2010 and that the change would not impact the company’s financial results for the current fiscal year. Even so, the impact is likely to hit hard in 2010.

Promotional products revenue comprised 75.9% of the company revenues in the second quarter, with agency services delivering the other 24.1%. Burger King-related revenues represent a significant portion of EMAK’s total revenues and the company said it is evaluating the full impact.

EMAK reported second quarter revenue of $37.5 million, a 2.4% increase from $36.7 million one year earlier. The quarter ended June 30. For the same period promotional products revenues were $28.5 million or 3% lower than the second quarter of 2008.

“As a company we are resilient, and our commitment to our promotional products business is unswerving,” Jim Holbrook, EMAK’s chief executive officer said. The firm also works with Kelloggs, Kohl’s, Draft and RealD on promotional products programs.

In addition to Equity Marketing, EMAK Worldwide operates three other agencies: Upshot (ranked No. 38 on the 2009 Promo 100 with an estimated $22.3 million in 2008 revenue), Logistix and Neighbor.

The volume of premium products packed into Burger King Kids Meal has fallen dramatically as customers migrate toward value menu items, sources said.

Premium Surge Promotions is a privately held firm based in Chicago, now named by Burger King as its premiums manufacturing supplier agency of record.

“We look forward to continuing to support the corporation’s high quality and safety production standards and practices across all stages of the manufacturing process as well as complementing its compelling brand proposition throughout the world,” said Abdiel Estrella, president and CEO, Premium Surge Promotions.