By Megan Barnett
October 3, 2012

Irene Rosenfeld oversaw the division of Kraft Foods, which became effective on Monday. Now CEO of Mondelez International, Rosenfeld joined Fortune’s Stephanie Mehta on stage at Fortune’s Most Powerful Women Summit.

Below is an unedited transcript:

STEPHANIE MEHTA: Good morning, everyone, thank you so much. Welcome to Irene who has flown in especially for this conversation, so we’re really grateful for your presence here. It’s a busy time for you. As of yesterday close of business, you completed the split of Kraft Foods into two companies and you are now Chairman and CEO of Mondelez International.


STEPHANIE MEHTA: Mondelez. So, what the heck is a “Mondelez”?

IRENE ROSENFELD: Well, it’s not intuitively obvious, but it is meant to capture the fanciful representation of delicious world. And we think it’s a great way to kick off our new vision to create delicious moments of joy. But it actually was a name that was created in a naming contest among our employees. And we had two separate employees, one in Europe and one in North America that came up with the name.

STEPHANIE MEHTA: So you didn’t use a branding consultant.

IRENE ROSENFELD: We did not. We did not. We’re very proud of the fact we did it ourselves.

STEPHANIE MEHTA: To remember how to pronounce the word Mondelez, I’ve been mentally picturing Condoleezza Rice. (Laughter.) Condoleezza/Mondelez. But I get it right, say it for me again?




STEPHANIE MEHTA: All right. Apologies to Condoleezza.

So, let’s talk a little bit about the split. Why did you decide — take us back to the decision to split this iconic company into two separate units: The grocery business, and the global snacking business, which is the one that you run.

IRENE ROSENFELD: Yeah. Well, we’ve been working pretty hard over the last five years to get our business on a better trajectory. And we did a number of things. We invested in product quality and marketing, in innovation. We made some portfolio changes, we bought the Nabisco business, we bought the Cadbury business. And after doing all of that, it became increasingly clear that we really had two very different portfolios that I believed could benefit from being run separately. And so that’s really at the origin of our decision to separate the companies. It enables us to create two very focused portfolios: A global snacking business, a North American warehouse business focused in grocery, and the opportunity to operate those businesses separately, to invest in resources appropriate to those different businesses, as well as to make it easier for our investors to evaluate the businesses. And that’s why we chose to split the company.

STEPHANIE MEHTA: When did that need for two businesses become apparent? When you were going through Cadbury, were you starting to realize that there were business profiles that were very different? I’m just curious if you could talk a little bit about when this crystallized for you.

IRENE ROSENFELD: It’s really after as we completed the integration of Cadbury because in most of our international markets, three-quarters to 80 percent of our revenue is coming from snacks, whereas in North America, only about a third was coming from snacks. And so it became increasingly clear that within North America, the opportunity to give focus to macaroni and cheese and Oscar Mayer and a number of our iconic North American only brands would be enabled by us separating the companies.

The international business today is about 75 percent snacks, about another 15 percent or so is beverages, and it’s a much more focused portfolio. And we believe we can take it to new heights as a result of that.

STEPHANIE MEHTA: So is there much of a — if you’ll excuse me — food fight over which products belong to which portfolio? Because I’ve got to tell you, mac and cheese on the go feels like a snack to me. (Laughter.)

IRENE ROSENFELD: There are many interesting discussions. It wasn’t really that complicated. The reality is, there are very few trademarks that overlap. Philadelphia Cream Cheese, for example, is in both companies domestically and then internationally. But for the most part, the two portfolios are really quite distinct. So, there wasn’t really much of a food fight, as you call it. I would say, though, the act of separating 95,000 trademarks has been quite an undertaking.

STEPHANIE MEHTA: That’s a lot of trademarks.


STEPHANIE MEHTA: If you would, as you reflect back on the process of splitting this very large organization, if you had to give advice to some of the very senior women in this room who are contemplating a similar reorganization. What are the things they need to think about, though, or what have you learned from your experience that you’d want to impart?

IRENE ROSENFELD: Well, I think the old song “breaking up is hard to do” says a lot. It’s a lot of work. It’s a lot of work. And I think the best advice I would give to anyone who thinks about it is you need to do it for the right reasons. There’s a lot of discussion when companies — when investors — particularly investment bankers talk about splitting up companies, a lot of discussions about multiple expansions. And the reality is, multiple expansions is an outcome, it’s not a strategy. And it really was not until we identified the opportunity to run our two businesses in a different way separately than we were together that we were comfortable with the decision to split.

But it’s a challenging decision. It’s a great deal of work. But I think when it’s done right, it can create great value, and we’ve been very pleased so far with the reaction to our split.

STEPHANIE MEHTA: Right. You do it for the right reason, not for financial engineering.


STEPHANIE MEHTA: So as you go forward with Mondelez, what kind of culture do you seek to create? Is this a huge new startup, or is this a company that builds on the longstanding Kraft tradition?

IRENE ROSENFELD: I think it’s a little bit of both, Stephanie. The reality is, it’s the world’s biggest startup. It’s a $36-billion startup, and we have every opportunity to think about what we want to do differently, to take what we didn’t like, leave that behind and take what we liked about the old company.

STEPHANIE MEHTA: What did you not like?

IRENE ROSENFELD: I think the opportunity to just break down barriers to enable collaboration rapidly across the different parts of the globe is the single biggest opportunity available to us, and it’s really one of the cornerstones of the new company. This whole idea of global innovation platforms, the opportunity to share best practices from one part of the world to the other, that is what will make our new company successful and enabling — creating a culture that will enable that is really critical to our future.

STEPHANIE MEHTA: And I know it’s early days, but are there processes or things that you’re implementing today that address that? That enable you to collaborate across borders or to bring best practices from outside North America into North America, for example?

IRENE ROSENFELD: We’ve certainly spent a lot of time talking about it. We just completed a series of workshops with each of our regions around the world talking about ways of winning. What it is that this opportunity can create for them. At the end of the day, all of these initiatives are about what’s in it for me, and it’s really about how will this enable our managers in local countries to be more successful? So we spent a lot of time talking about what’s in it for them, how they can move faster, how this will enable them to be more competitive. And I think at the end of the day, the proof in the pudding will be in the eating here, but I feel quite comfortable that we have enough examples of where this has worked that people are excited to embark on the journey.

STEPHANIE MEHTA: So a lot of food metaphors — proof in the pudding and the eating?

IRENE ROSENFELD: I’m a foodie, I can’t help it. (Laughter.)

STEPHANIE MEHTA: So let’s talk a little bit about the food business because now that you are a concentrated snacking company, one could argue that there’s a little bit of a target on you guys, particularly as we see a movement in cities like New York to ban sugary drinks or to reduce people’s consumption of snacks, calorie counts on everything. How do you manage in that environment when there is a lot of pressure on your business to produce more good-for-you products?

IRENE ROSENFELD: Well, first of all, I think the word “snacks” tends to have a negative connotation, but the fact of the matter is there’s a whole host of opportunities to snack in a consumer’s day. She starts the day, she has a pick-me-up with products like coffee and other things that will boost the day. There’s an opportunity in the course of the day to refuel. And then there’s, of course, the opportunity to treat yourself here and there.

So, we believe we can provide options for each of those occasions. And we’ve focused in a couple of different areas. Obviously, we’ve looked at our product portfolio itself. We’ve worked on the ingredient profiles of the offerings that we have today — sugar, calories, salt, and the fundamental ingredients. We’ve looked at the opportunity to lower those, to add back nutrients, vitamins, whole grains, for example.

We’ve worked very hard on our package sizes, portion control, to enable consumers to be able to indulge but in adequate portion sizes. And we’ve been able to continue to make sure that we’re addressing both calories in and calories out with partnerships with organizations like KaBoom and Salsa, Sabor y Salud, which are organizations focused on educating consumers about not only what they’re ingesting, but also what is coming out the other side.

So, I think there’s a number of actions that we are taking and will continue to take as responsible corporate citizens. But the fact of the matter is, it’s a terrific opportunity as we look at the growth of non-traditional meals in all markets around the world.

STEPHANIE MEHTA: And talk a little bit about that. I mean, there are some interesting global trends around eating that seem to be working in your favor.

IRENE ROSENFELD: Yes. One of the reasons we love snacking so much is that it is a growing behavior. More and more women are working. Consumers are on the go in virtually every market around the world. And so we are seeing that the growth in non-traditional food consumption is a growing trend, and we believe that we’re well positioned both in terms of the brands we’ve got, in terms of the categories that we compete in, we’re well positioned to participate in that growth.

STEPHANIE MEHTA: Irene was number-one on last year’s Most Powerful Women list. And as those of you who have been to the summit before know, part of the process of ranking women depends on the size of the woman’s business, the overall scale of the operation that she oversees. By deciding to split your company into two smaller individuals companies, you basically talked yourself out of the number-one position. So, the question I have is: As a leader, talk a little bit about the thought process that goes through ceding some of your empire.

IRENE ROSENFELD: Well, as a woman, I don’t have to tell you that size is not everything. (Laughter, applause.) It is fascinating to me, so many of my male colleagues have been so bothered about how could you make your empire smaller, not larger? But I come back to the fact that we see an opportunity to create two great companies from the beginnings of one. And I think as I said before, I’m quite pleased with the reaction that we’ve gotten from the market. Time will tell as we deliver on the commitments that we’ve made, but I’m quite confident that these two companies are well positioned to deliver the kinds of results that will be the envy of each of their respective industries.

STEPHANIE MEHTA: Nice use of the word “envy.” (Laughter.)

Can you just talk a little bit about, you know, it’s obviously very early to talk about legacy. And I don’t want to make it seem like I’m ushering you out the door before your time, because obviously you’ve got a lot of work to do at Mondelez. But when you think about the creation of these two separate companies, do you think you’re going to look back on this as a hallmark moment in your career and a way that you really contributed to the broader Kraft legacy?

IRENE ROSENFELD: I think so. Certainly, I love these businesses. They’ve been a part of my life for a very long time. And I just want them to be successful. And I think we’ve made great progress over the last couple of years, and this is a final step that can really unleash the two companies to stand on their own and be very significant contributors in their respective spaces.

So, I expect this will be one of the most significant moments in the course of my career. I’ve said that it’s been bittersweet. Many of these brands have been a part of my life and my professional life for years. But I am confident that we’re doing the right thing and that time will prove that to be the case.

STEPHANIE MEHTA: What do you think you’ll miss most about the grocery part of the business?

IRENE ROSENFELD: The people. The people. It’s a phenomenal group of people that have really delivered results on that business that are really impressive. We had a dinner last night, actually, for the two management teams to say goodbye. And I made that point, it’s really all about the people. But I think they have everything they need to be successful.

STEPHANIE MEHTA: And you will, obviously, continue to be a large shareholder of the grocery group because as you said earlier, every shareholder of the legacy Kraft company gets one share of Mondelez and a third of a share of Kraft. So, obviously, as an executive of the company, you’re going to be a big shareholder. Will it be hard not to offer advice to your former colleagues over on the grocery side?

IRENE ROSENFELD: It’s happening already. I said to the guy who runs our grocery business last night, “Hey, I like your new Velveeta Shells advertisement.” He says, “Don’t talk to me about that.” (Laughter.) But I will watch with great pride. I mentored many of these leaders in the course of their career. They have done terrific work, as I said, with their businesses and I will be cheering them from the sidelines.

STEPHANIE MEHTA: Great. Irene Rosenfeld, thank you so much for joining us. It was a great conversation.


STEPHANIE MEHTA: Thank you for being here. (Applause.)

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