Kraft CMO Deanie Elsner to Depart Amid Management Shake Up

Big Changes Coming Under New CEO

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Deanie Elsner
Deanie Elsner

Kraft Foods Group Chief Marketing Officer Deanie Elsner is leaving the company at the end of the month as part of a management overhaul orchestrated by new CEO John Cahill.

The maker of big food brands like Oscar Mayer, Planters and Jell-O said Jane Hilk, executive VP and president for enhancers and snack nuts, will serve as interim CMO while the company launches a search for a permanent replacement. The change comes after Mr. Cahill was named CEO in late December, replacing Tony Vernon. Analysts have speculated that the surprise CEO change could signal that Kraft might put less emphasis on marketing and focus more on cost-cutting.

In a Thursday statement announcing the executive changes, Kraft said "marketing remains critically important to the company and will move closer to the business operations, in order to sharpen focus and more effectively ignite brand rejuvenation." The company added that "a senior marketing executive will be named in due course to continue developing and enhancing Kraft's marketing capabilities." The new CMO will report to George Zoghbi. He had been vice chairman for operations, R&D, sales and strategy but was named chief operating officer as part of Thursday's moves.

"Our brands are the heart of Kraft, and no one understands this better than Deanie. Her dedication and marketing savvy helped our portfolio of brands become a standout in pantries and refrigerators across the United States and Canada. I am grateful for her contributions over more than twenty years at Kraft," Mr. Cahill said.

But on an earnings call on Thursday afternoon, Mr. Cahill suggested Kraft would make major changes in how it evaluates marketing spending, taking a more disciplined approach that puts a premium on return-on-investment analysis. "My view is that marketing remains paramount in its importance at Kraft," he said. "We would like to spend more money but we need to do it in an intelligent way." He foreshadowed a more "fact-based" approach, saying that "we can't continue to spend without adequate returns."

"It's clear we are not yet tapping the full potential of our brands," Mr. Cahill added on the call. Kraft brands are found in 98% of U.S. and Canadian households, but the company did not grow its market share in any category in 2014, he said, adding that it held flat in 60% of its business and lost share in the remainder.

Kraft's organic revenue grew 0.9% in 2015, the company said in its earning report, noting that the meager growth trailed North America food and beverage industry growth of 2%. The company cut ad spending during the year as a result of "digital efficiencies," but also because Kraft curtailed spending that was deemed ineffective, executives said.

The company also announced that Chris Kempczinski, who currently leads Kraft's Canada business unit, will take on an additional role as executive VP of growth initiatives and president of international.

Before Mr. Vernon departed, Ms.Elsner seemed to be settling in for a long tenure. She spoke at several high-profile industry events last year, including the Association of National Advertiser's Masters of Marketing conference. She took the CMO role in early 2013 after previously leading the marketer's beverages business.

Recently, she oversaw a shuffling of the company's ad agency roster that trimmed the company's creative roster to four shops: Leo Burnett, McGarryBowen, Taxi and CP&B.

Kraft also announced that Chief Financial Officer Teri List-Stoll would be departing at the end of the month.

Mr. Cahill will "take the next few months to work with the management team, get immersed in the business and spend time with the company's teams, customers and other business partners to develop a well-informed, comprehensive plan forward," the company stated.

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