Mondelez's CEO Pick Shows It Knows Its Strengths, Flaws: Gadfly
Look at the performance of Mondelez International Inc. in the past five years, and you could tell two very different stories about the packaged-foods company behind brands such as Oreo, Nabisco, and Triscuit.
On the one hand, its massive North America division is hurting. Like all of its rivals competing for center-store grocery dollars, it is having a harder time selling indulgent, shelf-stable snacks at a time when consumers are gravitating to fresh, healthy foods. Not long ago, it tried and failed to merge with Hershey Co., which raises questions about its ability to successfully use deal-making as a tool for growth.
On the other hand, Mondelez has shored up its profitability. It has hung onto a commanding market share in cookies, snack bars and fruit snacks. And, over the long haul, its stock price has grown substantially, as investors have grown more confident in its future.
So which narrative about Mondelez will stick? That's up to its new CEO.
Change Of Leadership
Mondelez announced on Wednesday that CEO Irene Rosenfeld will retire later this year and turn the reins over to Dirk Van de Put, currently the top executive at McCain Foods Ltd., a Canadian manufacturer of frozen French fries, appetizers and other foods.
Rosenfeld's departure will mark the end of an era of momentous change at Mondelez. She had been the CEO of Kraft Foods and orchestrated its split into two businesses, Kraft and Mondelez, back in 2011. Earlier, in 2010, she had helped steer Kraft's acquisition of Cadbury.
Come November, it will be Van De Put's turn to guide the snack-food behemoth into the future. He comes to Mondelez from a much smaller, $7.3-billion food business; it remains to be seen how well he can lead a much bigger enterprise. That said, he's not exactly new to sprawling companies, having held roles at Danone SA, Mars Inc., and pharmaceutical heavyweight Novartis AG.
Mondelez's announcement of Van de Put's appointment offers some clues as to what the board hopes he will bring to the table. For one, it noted he has worked on three continents, which suggests board members are bullish on his ability to maneuver in international markets -- a particularly important skill for a company that last year drew the majority of its sales outside North America.
On a call with investors, Rosenfeld said Van De Put has a proven track record of "walking and chewing gum," meaning he has demonstrated an ability to work on improving a company's top line and its bottom line at the same time.
It's easy to see why that would be important to Mondelez. Its quarterly earnings, released Wednesday, underscore the need for energizing sales: The company reported net revenue fell 5 percent compared to the same period a year earlier. Organic net revenue, a measure that excludes currency fluctuations and other factors, was down 2.7 percent. Some of that was a result of short-term problems associated with a massive global malware attack, but it also reflects bigger-picture headwinds.
Meanwhile, Mondelez has been on a crusade to expand its margins, and it needs a leader who can continue that progress.
Van De Put's appointment is the result of a years-long succession-planning process at Mondelez, suggesting his selection was anything but hasty. His résumé is mostly a good fit for the role. That suggests he's got a good shot at delivering for investors.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.