Irene Rosenfeld: the big cheese who wants to go to work on a Creme Egg
As Cadbury continues to resist Kraft's takeover bid, Stephen Foley takes a look at the food giant's determined boss
Sunday 13 September 2009
Did you know that "a grilled cheese sandwich has more nutrients than a peanut butter and jam sandwich"? Might you be persuaded that, "in this difficult economic environment, there is nothing more exciting to a consumer than grilled cheese and a bowl of soup"? Are you aware – really, properly paying attention to this – that the cheese in Kraft Singles "makes a great grilled cheese sandwich"?
It won't be long into a conversation with Irene Rosenfeld before she draws your attention to the sheer feelgoodness of her company's processed cheese, or the value for money you get from Kraft's macaroni and cheese in a box (40 cents a serving), or how many different ways there are to eat an Oreo cookie. Yes, of course she drank the Kool-Aid. It's one of the first Kraft brands she was given responsibility for.
Although Rosenfeld has only been chief executive of Kraft since 2006, she spent 22 years of her career at the drinks and snacks giant before that. She is the quintessential marketeer, having joined the company as a market research manager in 1981. Now she faces her toughest selling job to date: the attempt to persuade Cadbury shareholders that they should swap their holdings in the historic chocolatier for a little bit of cash and a lot of Kraft shares. The audacious takeover bid, pitched at an opening $16.7bn (£10bn), has been given short shrift so far by her opposite number, Todd Stitzer, at Cadbury, but those who know Rosenfeld say you should never bet against her getting what she wants – eventually.
That was certainly the case with the top job at Kraft. Despite having played a major role in preparations for Kraft's flotation in 2001, before which it was a division of the tobacco behemoth Philip Morris, Rosenfeld was passed over for the job of running the whole company. She quit, and went to run Frito-Lay, Pepsi's crisps and snacks division, where a blizzard of new product launches – including healthier snacks – so burnished her credentials that she got a second shot at the top job at Kraft two years later.
This basketball-playing, rollerblading executive, a self-confessed iPod addict who often has Simon & Garfunkel or Crosby, Stills, Nash & Young blaring, isn't taking Cadbury's "No" for an answer.
She's already shown her appetite for big acquisitions, snapping up Danone's biscuit business and getting a helpful new set of ins with European retailers, which Kraft has been using to expand its own product distribution, too. To woo her UK prey, Rosenfeld has extended her effusive endorsements beyond the Kraft product range. In an in-house interview about the proposed deal last week, she gasped at the thought of having to pick just one Cadbury brand as a favourite. "There are so many to choose from that it's a little hard to pick," she said. "I'd have to say on a year-round basis I think Trident Gum. I'm a heavy, heavy user of that product. But I would say that, on a seasonal basis, I just love those Cadbury eggs." And she added later: "Those eggs are a one-of-a-kind experience. If you watch people eating them, the ritual that one uses to eat a Cadbury egg is not unlike the ritual that we talk about to eat an Oreo."
"On a seasonal basis"? This is the language of the consumer-products company boss and it's no more odd than hearing A G Lafley of Procter & Gamble describe how he washes his smalls. Rosenfeld is just as comfortable weighing in on topics such as world hunger and environmental sustainability in the rarefied forums of Davos.
In short, this skinny, angular, 56-year-old native of Brooklyn, New York, is a pro. As a result, she has managed both to win the confidence of Kraft's investors and boost the morale of its staff since returning to the company.
There are signs that she is making Kraft a nimbler operation, with an emphasis on new products. Market research and focus-group work has been elevated, as you would expect under someone steeped in these dark arts. Probiotic cheeses are appealing to a desire for healthier products in the West; a tweak to the recipe for Oreos in China turned it into one of that country's fastest-growing biscuits. And the focus on innovation has cheered up a workforce that has been brutally treated by years of downsizing.
Kraft had "lost its heart and soul" by 2006, she told an audience at her alma mater, Cornell University. "The tremendous focus on costcutting, restructuring and headcount reductions had left the firm tired, raw and somewhat disillusioned. It is hard to get up every morning when costcutting is your end rather than a means."
The share price has been modestly responsive, down 13 per cent over her tenure against a consumer staples sector of slightly more than that, Financial results have improved in recent quarters. Investors feel cheered.
She is an inspirational leader, says Thomas Russo, a partner with the investment firm Gardner Russo & Gardner, a regular investor in food company stocks. "I first met her at the time of the flotation and she was considered a rising star then. She had a presence and a command of her business that marked her out as an important talent, and she came back from Pepsi schooled in the need to put the focus on the customer."
Rosenfeld met her husband, a mergers and acquisitions specialist, at Kraft, and their two daughters are now grown up. Out shopping, she will infuriate them by rearranging the supermarket shelves if they are not displaying Kraft products the right way, and she'll note down any out of stock products. The teams responsible for getting product into stores always try to keep track of her whereabouts, just to keep one step ahead of her shopping trips.
It's an attention to detail and a determination to get the best out of everything that her teachers and contemporaries at Cornell have often recalled. They tell the story of how she posted a dollar bill with every questionnaire she sent out as part of her PhD research project, and consequently got a higher response rate than anyone before.
Rosenfeld herself has joked about her determination. "Back when I was treasurer of my Brownie patrol, I was diligent about collecting those dues," she said. Cadbury may have pushed her away this past week, but it would be too early to count her out. Even if she has to go round their shareholders one at a time collecting Yesses.
As Voltaire once said, “Ice cream is exquisite. What a pity it isn’t illegal”
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