Kraft Rosenfeld

US: Kraft names its leaders for the split company in 2012

The food giant has announced that Kraft chairman and CEO, Irene Rosenfeld, will head the as-yet unnamed world-wide $31-billion snacks business, and Anthony Vernon, executive vice president and president of Kraft North America, will head the smaller $17-billion and slower-growing North American grocery business after the breakup at the end of next year.

The only new name to the top echelons of Kraft is that of John Cahill, 54, who will become non-executive chairman of the North American grocery company. He is a partner of private equity firm Ripplewood Holdings. Cahill will join Kraft Foods in January to begin work on the separation. 

Rosenfeld has been CEO of Kraft Foods since 2006 and chairman since 2007. Vernon joined Kraft Foods in 2009 as president of its North American business. Before that, he spent more than 20 years with Johnson & Johnson.

The two executives, reports The Wall Street Journal, must sort out the fates of several brands, structure their sales forces and make a number of personnel decisions quickly, because the company plans to detail how the break-up will look in a Securities and Exchange Commission filing by early in the second quarter of 2012.

Vernon might have the tougher job. His $17-billion business has about half the revenue and half the number of billion-dollar brands as the global snacks business that Rosenfeld will head. Being smaller could affect the company’s ability to get the best prices and contract terms for commodities, costs of which have been rising. His sales force also could be at a disadvantage with retailers since they won’t have the same leverage now that they’re losing the billion-dollar Nabisco brand of cookies and crackers to Ms. Rosenfeld’s company.

In addition, certain brands, like Philadelphia cream cheese, overlap with the geographic region encompassed by the global snacks business, creating the question of which company will end up owning the brand. Sales of Philadelphia are split evenly between North America and the rest of the world, so one company may have to license the brand from the other. Gevalia, an international coffee brand, will soon be introduced in U.S. grocery stores, and its future ownership hasn’t been announced yet, either.

Both companies will be headquartered in the Chicago area but the exact locations haven’t yet been announced.

Kraft after the split