Rosenfeld’s wretched road to Mondelez

March 22, 2012

By and large, corporate life is no laughing matter. One exception – and a cause of bottomless mirth at that – is the pompous business of corporate name-minting.

Latest in a long line of jokes is “Mondelez International”. What, you ask? It’s the new monicker for the Kraft spin-off snack business which will shortly be headed by Irene Rosenfeld, after offloading the lumbering US grocery business onto poor old Tony Vernon.

One of Vernon’s few high cards will be the fact that he retains the Kraft name which, whatever its downmarket connotations, has the merit of being agreeably monosyllabic and memorable.

If only we could say the same for Mondelez International. Why, oh why (as The Daily Mail might put it) couldn’t it take the Cadbury name? After all, organisationally and with the exception of a few Kraft legacy brands such as Oreo, Mondelez is the ex-Cadbury company. It faithfully maps Cadbury’s emerging markets strategy and, if it is to achieve the higher margin growth commonly associated with the snack sector, that will in no small part be due to the dominance of Cadbury brands within its portfolio.

Instead of the instant mnemonic, however, we have the instantly forgettable “Mondelez”. Apparently, this was dredged up from an exhaustive trawl of 2,000 ideas – fashionably and inexpensively crowd-sourced from Kraft employees. The ultimate choice was, in fact, a portmanteau word derived from one suggestion fielded in America and another in Europe. Which probably tells you all you need to know about Rosenfeld’s imaginative powers. Camel, horse, committee anyone?

On second thoughts, however, I’m not entirely convinced by this folksy little conceit of hers. “Mondelez” has about it a strong whiff of corporate ID specialist. Allegedly it’s a bit of cod-Latin, derived from a hybrid of mundus (world) and delectatio (delight or pleasure), which is more readily understood by substituting the French modern equivalents “monde” and “délice”. Note the subtle potential French wordplay – Mon délice – perfect but for the fact it is grammatically incorrect, délice being feminine.

What does all this remind you of? Yes, right first time: Diageo, Altria, Aviva and most memorable of all – for the wrong reasons – Consignia. All of these rejoice in being bland latinisms (although Diageo sounds all Greek to me – dia, “through”; geo, “world”: but let’s not get pedantic about it). It seems a curious irony that at a time when interest in classical languages is at an all time low, corporate identity specialists have turned their abuse into a high art form.

And, in their earnestness not to create offence by minting something more meaningful, have often achieved laughable results. Take Aviva for example. On one reading, it could mean “Without life”.

As for Mondelez, which Americans clearly have difficulty in pronouncing, I shall leave you with the wise words of Sharon Shedroff, founder of San Diego consulting firm Strategic Vision Inc:

“Until the brand is established, it will be difficult for people to give it meaning in the US and probably in Asia. Brands under it, like Oreo, could lend credibility to Mondelez.”

So why go to the trouble and expense in the first place?

Kraft split raises more doubts about value of Cadbury takeover

August 4, 2011

On hearing that Kraft intended to split it operation into two, the first image that came to my mind was that of the Grand Old Duke of York.

Hopefully (for the sake of shareholders if no one else) Kraft chief Irene Rosenfeld’s grasp of tactics is superior to that of the benighted generalissimo. But we cannot be sure at this stage and nor – judging by their confused reaction – are some of Kraft’s investors.

True, one of the most tiresome of these – corporate raider Nelson Peltz, who has been endlessly belabouring Rosenfeld for Kraft’s dead-in-the-water share price – thinks it’s a great idea to split the lumbering behemoth into a fast-track candy and snacks company centred on emerging markets (and by implication double digit growth) while leaving the dreary North American grocery business to slumber on as a “yield centre” with a no-hope share price.

According to his logic, Rosenfeld has been playing a long and crafty (sorry) strategic game, in which the $19bn Cadbury hostile takeover was only the first move. Rosenfeld needed Cadbury for its dominance in emerging markets, so she could reshape Kraft’s existing snack lines into a global growth business. Warren Buffett, another long-time Rosenfeld critic, seems to have adopted the same line, albeit in more muted language.

Having met Rosenfeld, I can attest that she indeed a very sharp cookie. But whether she has been that crafty I – and rather more importantly, many members of the investment community – have reason to question.

Undoubtedly she has been limbering up a dramatic piece of financial engineering for some time. But maybe that’s all it is: one last, opportunistic, throw of the corporate dice to get two of her most irksome and powerful critics off her back.

Here’s the flaw in the grand strategy theory. If Rosenfeld had the idea of capturing access to developing markets all along, how come she so successfully managed to jettison all the senior people who knew anything about exploiting them? I am of course talking about virtually the entire senior tier of Cadbury management, which formed a queue to the exit within months of the takeover in early 2010.

I am afraid Kraft lifer Tim Cofer – if that’s who ends up getting the top job at Kraft Snacks and Candy – simply won’t cut the mustard by comparison.

If Kraft, in buying Cadbury, was merely parlaying itself into the world’s emerging markets, it chose a peculiarly clumsy and perverse way to do it.

That was quick – Tamara Minick-Scokalo quits Kraft. Ignasi Ricou goes too

October 12, 2010

Whatever is going on at Kraft’s newly swelled confectionery division (formerly known as Cadbury)? Two top executives are walking, both allegedly for “personal reasons”. And one of them – head of European chocolate Tamara Minick-Scokalo – was hired only a few months ago.

Ignasi Ricou, the other executive to depart, is just the sort of top management Kraft can least afford to lose. After the controversial $20bn Kraft takeover earlier this year, Cadbury operations accounted for about 80% of Kraft’s confectionery interests worldwide – and punched even further above their weight in fast-growing emerging markets. Clearly Cadbury management continuity – at least in the medium term – is critical to bedding down what Kraft has acquired. Ricou was apparently a showcase example of continuity in action. He joined Cadbury in 2003 and rose to president of European operations just prior to the hostile takeover bid. Post-merger, he agreed to stay on as head of European sales and the (high-margin) gum and “candy” business.

In some ways the trajectory of Minick-Scokalo has been even more bizarre. Originally from Procter & Gamble, she was parachuted into Cadbury in 2007 as global commercial director, then made head of European operations in late 2008. The graft didn’t take: after seven months in the new job, she was fired and Ricou took over. But that wasn’t the end of the story. By spring this year, she was back at her old job – well almost – helping to fuse Cadbury chocolate culture with Kraft’s. Evidently it has proved pretty immiscible.

And that’s not the only evidence of the post-merger fabric coming unknitted. Look around and you will find painfully few senior Cadbury executives still in command. Trevor Bond, who used to be in charge of Cadbury in the UK, has become Kraft overseer in Europe and now takes on some of Ricou’s role; there’s also Marcus Grasso in Brazil, and Mouli Venkatesan and Narayan Sundararaman in India.

One intriguing survivor is Mark Reckitt, formerly Cadbury’s chief strategy officer – who played a key role in integrating the two operations after the merger. Formally, Reckitt left in July. But he’s back in a consultancy role, one day a week, managing the shop at Green & Black, the organic chocolate division. It would be no surprise to find Reckitt – in due course – heading a management buyout of the operation. It’s difficult to see what alternative fate awaits a premium organic chocolate brand tucked among all those processed foods.

Irene Rosenfeld, Kraft chief executive and the takeover’s architect, will shortly be visiting these shores for the first time since the merger. On her agenda will be some factory visits and a bit of political schmoozing. It sounds as if she’s just in time to deal with a few unscheduled senior management problems as well. No doubt Rosenfeld will pass off Minick-Scokalo and Ricou as transitional management whose time had come to an end. I’m not sure Kraft shareholders will agree with her, though. Too much command and control from Northfield, Illinois would be my verdict.

I’ll keep you posted.

Is Kraft’s Crunchie approach going flaky?

November 4, 2009

Irene RosenfeldCadbury is not looking such an endangered species after a set of third quarter results from Kraft that failed to wow. Unlike Cadbury’s own sparkling financial performance unveiled the other week. Where was the sucker punch before the knockout blow –  a firm bid on the table by next Monday? Or maybe that was exactly the point: Kraft is seeking to lull Cadbury into a false sense of security before Kraft ceo Irene Rosenfeld delivers the coup de grace. “We remain interested but will maintain a disciplined approach” to the Cadbury bid was her muted gloss on the Q3 results. You bet she remains interested. If she fails to produce a convincing bid, she’ll soon be history. No one at Cadbury is in any doubt that she will deliver.

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