The ever-popular Irene Rosenfeld, CEO of sprawling food giant Kraft, has everyone guessing again.
Her plan to split Kraft into slow-moving US grocery brands and faster-growing confectionery brands, built around the £12bn Cadbury acquisition, raises the question: what’s the point of the grocery brands?
They account for about $16bn of sales from things like Mac & Cheese, Oscar Mayer meats and Philadelphia cheese, the old core of the company when it was spun off by Philip Morris.
Cadbury et al, which also includes Cadbury’s Trident gum, Milka and Oreo biscuits sells about $32bn with 42 per cent coming from so-called emerging markets.
The plan seems to be for the confectionery business (why not rename it Cadbury?) to surge onwards, enjoying the sort of premium ratings that it used to have as independently-owned Cadbury and which Nestle now enjoys while the US food business does, what exactly?
The likes of Mac & Cheese and Philadelphia are low growth because better off consumers are turning away from such processed products (there are a few such consumers left) and retailers have bitten into sales and margins with their own brands.
Kraft has recently tried to revive these by hiring a number of different creative agencies to handle them although this plan now looks a bit like the company saying to investors: we’ve tried guys and it still doesn’t work.
So presumably they’re up for sale, either in piecemeal lots to other food companies or private equity outfits or in a job lot, to a yet to be invented US version of Britain’s Premier Foods.
All of which makes the Cadbury takeover look a bit pointless to everyone, chiefly former Cadbury workers and management but also consumers, apart from Ms Rosenfeld’s shareholders (her job, of course, is to look after their interests).
But, as my chum Stuart Smith likes to point out, most of the Cadbury management has cleared off and Cadbury as it now stands will presumably be burdened by a big chunk of debt incurred in the £12bn takeover.
Its main rival Nestle, by comparison, is awash with money, having raised $28bn by selling its stake in US eyecare business Alcon to Novartis for a chunky $28bn and it makes more money than Kraft anyway.
So Cadbury looks more and more like a rescue deal for low-growth Kraft. But the real winner in all this is likely to be Nestle.