A Day After Kraft Split, Irene Rosenfeld Shares Lessons, Observations

Speaking the day after she split her business into two separate publicly traded companies -- a global snacks business named Mondelez International and a North American grocery business called Kraft Foods Group, Irene Rosenfeld shared her insights from the split at the Fortune Most Powerful Women Summit in Laguna Niguel, Calif. Ms. Rosenfeld, formerly chairman-CEO of the combined company now holding the same titles at Mondelez, insisted that separating the companies did not involve a "food fight." "There are very few trademarks that overlap," she said. "Philadelphia Cream Cheese, for example, is in both companies domestically or internationally, but for the most part the trademarks are very distinct. But I will say, the act of separating 95,000 trademarks has been quite an undertaking." She advised that other companies contemplating a split should make sure they do it for the right reasons. "When investors, particularly investment bankers, talk about splitting up companies there's a lot of discussion about multiple expansion and the reality is multiple expansion is an outcome, not a strategy. It really was not until we identified the opportunity to run our businesses differently separately than we were [running them] together that we were comfortable with the decision to split." She said the key insight was that in most international markets three-quarters to 80% of the revenue was coming from snacks, whereas in North America less than one-third was derived from snacks. But now that Mondelez is a concentrated snacking company, it may have a target on its back for governments and organizations who want to try to encourage healthier eating. Ms. Rosenfeld admitted the word snacks "tends to have a negative connotation," but said the company has already started addressing these concerns. "We've looked at product portfolio, we've looked at the ingredient profiles of the offerings we have today -- sugar, calories, salt -- and have looked at opportunity to lower those and add back nutrients, vitamins, whole grains, for example. We're very focused on package sizes, portion controls. And we've been looking at continuing to address both calories in and calories out," she said. Shifts in global eating trends are working in Mondelez's favor. Snacking, Ms. Rosenfeld pointed out, "is a growing global behavior. More and more women are working, consumers are on the go in virtually every market around the world. The growth in nontraditional food consumption is a growing trend and we believe we're well-positioned in terms of the brands we've got and the categories we compete in." Fortune's Stephanie Mehta, who was interviewing the Mondelez CEO, pointed out that Ms. Rosenfeld was the magazine's No. 1 most powerful woman on its 2011 list but by splitting the company and reducing the scale of her kingdom, she'd knocked herself off that top perch. Ms. Rosenfeld's retort played to the crowd. "As a woman, I don't have to tell you size is not everything," she said. "So many of of my male colleagues have been so bothered about 'How could you make your empire smaller, not larger?' But we saw the opportunity to create two great companies from the beginnings of one and I'm quote pleased by the reaction we've gotten from the market." Ms. Rosenfeld is still shareholder in the Kraft grocery business, and said the management teams of both Kraft and Mondelez held a dinner last night to say good-bye. On the temptation to offer advice to Kraft, "it's happening already," she said. "I said to the guy who runs our grocery business last night, 'Hey, I like your new Velveeta Shells adverting.' He said 'Don't talk to me about that !'" As for the name, she touted that it was conceived not by a branding consultant but by an employee contest in which two separate employees, one in Europe and one in North America, came up with Mondelez. "We're very proud of the fact we did it ourselves," she said.

A Day After Kraft Split, Irene Rosenfeld Shares Lessons, Observations

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