Kohnstamm demonstrates that a small Twin Cities firm can beat out big agencies from large markets in the competition for Fortune 500 clients.

BOUTIQUE AGENCY OF THE YEAR: Kohnstamm Communications

IT would be nice to think the myth that clients need a big agency with a New York presence to consistently secure top-tier media placements has long been laid to rest, but just in case it still persists, there’s Kohnstamm Communications, which provides conclusive proof that a boutique firm (now about a dozen people) can consistently get its clients prominent coverage: over the past year or so, Kohnstamm clients have been featured in The Wall Street Journal, BBC, USA Today and Barron’s, and on The Today Show, The Food Network’s Unwrapped and CNBC’s Squawk Box.

The firm also demonstrates that a small Twin Cities firm can beat out big agencies from larger markets in the competition for Fortune 500 clients, picking up Honeywell International’s home comfort products consumer account last year. As a result, half of Kohnstamm’s revenues now come from companies with annual revenues exceeding $500 million. And a majority of the firm’s clients are now based outside of the Midwest, including companies from Denver, Texas, Florida, Los Angeles, San Francisco, Boston, Bethesda, and Reykjavik, Iceland.

Agency founder Josh Kohnstamm cut his teeth at Hill & Knowlton, where his clients included Mall of America, Eastman Kodak and Mazda, before launching his own Twin Cities Public relations firm in 1991. He is joined by Breanna Welke, a consumer PR veteran formerly with Golin Harris in Chicago whose experience includes work with Unilever, SC Johnson, the Florida Department of Citrus and General Mills.

The firm enjoyed a very healthy 17 percent growth in 2009, with fees topping $1.5 million. Slightly more than half of that revenue comes from the food and beverage sector, while the firm is also known for its work in the professional services arena. But the biggest change saw the growth of the firm’s recent social media capabilities, now about 20 percent of revenues, most notably in the food and consumer packaged goods arena, with clients turning to Kohnstamm to assist with social networking and customer engagement programs. The firm also saw growth in the corporate social responsibility practice, with a focus on sustainability issues; in crisis PR; and in new practice groups focused on beauty and the medical device and healthcare sectors — a natural fit for a firm in the heart of Minnesota’s “medical alley.”

Longtime clients include Traveler’s Insurance, Thai Kitchen/Simply Asia (a subsidiary of McCormick), Malt-O-Meal, the University of St. Thomas Opus College of Business, law firm Nilan Johnson Lewis, and Kettle Cuisine. The agency added Montreal-based Cascades paper company and its tissue division to its roster of socially responsible clients; picked up an assignment for the launch of a breakthrough prostate health imaging client, ProUroCare; and kicked off its beauty practice with work for Lavera Naturkosmetik, Europe’s largest “green beauty” brand, for its North American expansion. Other new business wins included Elliott Wave International, Happy Baby Food, and La Tortilla Factory.
Kohnstamm’s work included feature coverage of ProUroCare’s technology, which digitally maps the prostate inexpensively and accurately, on the daytime medical talk show The Doctors; a media tour featuring Dr. Sears, who co-authored The Happy Baby Book with client, Happy Baby Foods; and most notably the “Obama’s favorite” campaign for Honest Tea, which capitalized on the new president’s love for organic bottled Honest Tea to drive inauguration-related coverage.

“What separates champion golfers from the rest is that champions must play well from the rough as well as the fairway,” says Shazi Visram, founder of Happy Baby Foods. “Besides being incredibly talented day-to-day, my PR team members at Kohnstamm have been great ambassadors for us when we needed it the most.”
Clients have increasingly requested Kohnstamm to book media tours and interviews in Europe, Asia and Latin America as a normal course of work for them. In response, Kohnstamm has stepped up its global reach, leveraging online databases to help secure coverage in Canada for Sri Lankan tea-maker Dilmah, and in Hong Kong and London for bear market economists at Elliott Wave International.
 

BOUTIQUE AGENCY OF THE YEAR

MINNEAPOLIS-BASED Kohnstamm Communications provides conclusive proof that a boutique firm in a smaller market can consistently generate prominent national media coverage, securing feature articles in The New York Times, The Wall Street Journal, Time, Newsweek, Fortune, BusinessWeek, and on CNN, CNBC, NPR, NBC’s Today Show and ABC’s Good Morning America. The firm is probably best known for its work in the food and beverage area (about half of its revenues), where clients include the Thai Kitchen/Simply Asia subsidiary of McCormick, Malt-O-Meal, and Kettle Cuisine. But Kohnstamm also has expertise in professional and financial services, healthcare, corporate social responsibility, and – a new area in 2009 – beauty. New business successes included assignments from Cascade’s Paper of Montreal, Elliot Wave International, ProUrocare, Happy Baby Food, La Tortilla Factory, and Lavera Naturkosmetik. As a result, fees were up by 17 percent. Kohnstamm is also a permanent fixture on our list of the Best Boutique Agencies to Work For in the United States.
 

HOW DID YOU SELECT YOUR AGENCIES OF THE YEAR?

We met with more than 80 of the firms included in this Report Card personally, sitting through credentials presentations and discussions about philosophy, culture, values and strategy. In addition to those meetings we spoke with more that 100 clients and industry experts. In almost every case, we asked the individuals which firms they most respected. We also took into consideration growth and industry recognition such as awards, which provided us with a unique insight into the way participating consultancies think. Both historic positioning in a market — consistent leadership over time — and more recent accomplishments and performance were taken into consideration.

May 2010