Present Value: Corporate titan Irene Rosenfeld reflects on more than 30 years in the food industry

By Serena Elavia and Jonathan Tin, both MBA ’20

By: Present Value Podcast Team
Present Value: Irene Rosenfeld

Present Value, an independent editorial project produced and hosted by Johnson students, had the pleasure of interviewing Johnson graduate alumna Irene Rosenfeld ’75 (A&S), MS ’77, PhD ’80. A 36-year veteran of the food industry, Rosenfeld was chairman and CEO of Mondelez International, 2011–2017, and chairman and CEO of Kraft Foods, 2006–2011. 

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Brand building

After becoming CEO and chairman of Kraft Foods in 2007, Irene Rosenfeld went on a listening tour with employees, and what she learned shaped her decisions and actions for the company moving forward. “There’s no question that the folks that are in the company typically know best what’s the matter and what needs to be done to fix it,” she says. From those interactions, she familiarized herself with a company known for iconic grocery brands like Kool-Aid, Jello, Maxwell House, and Kraft Macaroni & Cheese—and saw that the company’s investment in those brands fell far short of their competitors’ investments in their brands. She knew then that she had to build out the “fundamental infrastructure of the brand equity” in order to stave off the competition and deliver the legendary value that she is now known for having done. Each brand within Kraft needed something different, and from brand equity to product quality to product innovation, she led the revitalization of each one with a tailored approach.

Splitting Kraft into two companies

One of Rosenfeld’s most defining decisions at Kraft Foods was to split the company in two in 2012 to form Mondelez International and Kraft Foods Group, with the former focused on high-growth snack foods and the latter focused on the grocery business. During her Present Value interview, she shares that the impetus for the split came in a board meeting after­­ she had led the controversial acquisition of Cadbury in 2010. She realized that “there were not enough common threads underpinning the two companies.” The decision to s­plit Kraft Foods did not come lightly, as making a company smaller was not a popular or common idea at the time, and she faced many questions from her board and the company’s investors. Rosenfeld, however, knew that she had two distinct businesses that required different management styles and different leaders, and she ultimately communicated to her board and investors that having two separate companies would generate greater value. As she looks back at this decision, she says, “I would say the results would speak for themselves.” At the helm of Mondelez, she would be responsible for 20 out of 21 quarters of revenue growth resulting in 600-plus basis points of margin improvement.

What’s next for the food industry

Rosenfeld sees snacking as an enduring trend, defining it as eating nontraditional meals rather than simply unhealthy food. She believes it’s up to the food industry to leverage technology to create snacks for today’s consumers. She shares the example of the breakfast biscuit belVita, which uses a special formulation to ensure that the glucose breaks down at a more constant rate, making consumers feel full for longer periods after consuming it. By the same token, she recognizes that consumers often don’t want to compromise on taste, offering the example of the high-end brand Tate’s Bake Shop, which Mondelez acquired in 2018. Tate’s cookies have indulgent, natural ingredients and a loyal following. Rosenfeld believes that Mondelez will face a balancing act between investing in traditional core snack products and responding to new trends in the food industry. And for her, this exercise all starts with knowing their customers and what their needs are, to ensure that a company like Mondelez has something for every snacking occasion in their portfolio of products.

Leadership tips to the top

Rosenfeld likes to joke that before buying Cadbury she loved reading the National Enquirer to hear about the latest intrigue with the British royal family. Then one day she found that she was reading about herself and that “the narratives about you are not necessarily accurate.” From this experience came her first piece of advice for future leaders: have a thick skin when dealing with public criticism, but also stay aware of and empathetic toward the concerns of different stakeholders. She offers multiple examples where Mondelez was wrongly villainized in social media, from an errant tweet in Malaysia that led to a countrywide boycott of Mondelez products to a public uproar in the UK over the number of peaks on a Toblerone bar.

After all the good and bad publicity, however, she returns to her mentees and the people she developed as “the most rewarding part of a job like mine.” When asked how she developed her people, she said it was her priority to think about what skill sets and experiences they would need when they became CEOs of their own companies. This approach led her to expose her mentees to many different leadership experiences that some leaders would be reluctant to cede control of, such as dealing with activist investors, because she felt that “there’s no substitute for sitting as close to the chair as you can sit until you’re actually in the chair.” She was lauded at the time of her retirement as having mentored 13 direct reports who went on to hold CEO positions; at the time of this interview, that number had grown to 16.

Irene expands on the above topics and more in her full episode with Present Value. Listen, share, and subscribe!