Ex-Kraft official will lead it

Rosenfeld is named CEO of a firm that frustrated her to the point of quitting

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June 27, 2006|By SUSAN CHANDLER | SUSAN CHANDLER,CHICAGO TRIBUNE

Irene B. Rosenfeld isn't a patient person.

That's probably one of the biggest reasons why the former Frito-Lay chief executive has been tapped to head struggling Kraft Foods Inc., industry experts say.

Three years ago, Rosenfeld was the third-highest-ranking executive at Kraft but left because she was frustrated with the slow decision-making coming out of an unwieldy organization headed by co-chief executives Betsy D. Holden and Roger K. Deromedi.

Since then, Holden was pushed aside in favor of Deromedi, and he was shown the door yesterday. The food giant said Deromedi and Kraft's board mutually agreed that he should leave to pursue other interests.

Gaining experience

By jumping ship at Kraft, a company where Rosenfeld had invested 22 years, and becoming head of PepsiCo's $10 billion Frito-Lay division, Rosenfeld gained valuable experience and exposure, positioning her on the short list when Kraft's board went hunting for its latest CEO.

"She brings a great balance of strategy and execution, and she truly understands the organization - where it has come from and where it needs to go," said Tierney Remick, head of the consumer practice at Korn Ferry, the executive search firm.

"The credibility she has with the employee population combined with her knowledge of the business and its challenges will translate into a very fast start."

Rosenfeld was not available for comment.

Kraft's parent, Altria Group Inc., indicated yesterday that it is looking for Rosenfeld to push the company faster and farther.

entire board is delighted to have Irene in place," said Altria CEO Louis C. Camilleri, who also serves as Kraft's chairman. "While the fundamentals of the business continue to improve, we are confident that Irene will accelerate the execution of Kraft's growth strategy, build value for shareholders and lead Kraft when it becomes an independent company.

Altria is expected to spin off the part of Kraft it still owns in an initial public offering later this year or next when it settles remaining tobacco litigation.

Jean Spence, Kraft's executive vice president of global technology and quality, believes Rosenfeld will be able to deliver.

"Things move very quickly with Irene," Spence said. "She is really courageous and willing to speak up for what needs to be done. She is one of the smartest people I have ever worked with in business."

But some analysts wonder if Rosenfeld is, in fact, too close to Kraft to be the change agent that the company needs. Rising raw materials prices have cramped margins as generic food manufacturers have cut into Kraft's hefty profit margins.

"New jockey, same horse," quipped Prudential Equity analyst Robert Campagnino, who maintained his "under-weight" rating on Kraft's stock.

Rosenfeld was a psychology major as an undergraduate at Cornell University. But she went on to obtain a master's degree in business and a Ph.D. in marketing and statistics, also from Cornell. Her first job was with an advertising agency Saatchi and Saatchi in New York in 1979.

Two years later, she joined General Foods Corp. as an associate market research manager. She became part of the Kraft organization when General Foods and Kraft were both acquired by cigarette maker Phillip Morris.

Early in her career, she was product manager for Country Time lemonade and worked her way up to head Kraft's beverage division in 1991, which includes Kool-Aid. Three years later, she was named general manager of desserts and snacks.

In 1996, Rosenfeld was named president of Kraft's Canadian operations, a grooming spot for up-and-coming executives. Four years later, she was named president of operations, technology and procurement at Kraft Foods.

She spearheaded Kraft's $19 billion integration of Nabisco and was part of the Kraft senior team that sold the $9 billion initial public offering in Kraft Foods to Wall Street in 2001.

A year later, she was named president of Kraft North America, the company's largest division by far, reporting directly to Holden, who headed Kraft's domestic business.

But that situation didn't last long. By July 2003, Rosenfeld resigned along with another top Kraft executive as Holden shuffled her management team as the company's troubles deepened.

`The wrong person'

"I felt at the time that the wrong person got shot, that it should have been Betsy," said John McMillan, senior food industry analyst at Prudential Equity Group. "When Betsy got cut, people realized how badly Irene was missed."

The job that finally attracted her in September 2004 was CEO of PepsiCo's Frito-Lay division, a $10 billion business that includes Lay's potato chips, Doritos, Fritos and Cheetos snacks and Rold Gold pretzels. Since then, Frito-Lay has continued to prosper under Rosenfeld's leadership as it rolls out healthier versions of its not-very-healthy snacks.

In 2005, her first full year on the job, the mother of three earned $2.2 million, including a bonus of $1.4 million.

Susan Chandler writes for the Chicago Tribune.

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