Blog: Kraft's choice of name may not be the only surprise
Dean Best | 23 March 2012
Mondelez International. The proposed name for Kraft Foods' global snacks business caused incredulity among many industry watchers but there could be further surprises ahead from the new company.
Kraft's decision to fuse the French word 'monde' and 'delez' (a "fanciful expression" of the word 'delicious') together prompted, let's say, a stunned reaction from parts of the sector. The fact that the new company's stock ticker - MDLZ - spells out the word 'muddles' also caused a few chuckles. (Although, perhaps, not as may sniggers as it did in Russia, where pronounced mohn-dah-LEEZ - as Kraft insisted the word should be pronounced - it is said to mean something else entirely).
Of course, there is the argument that the average punter is and will be more interested with the brands behind the new Mondelez (Cadbury, Oreo et al) than the company's corporate moniker. But it is fair to argue that, perhaps, Kraft could have chosen one of its global snack brands and used that for the new name (as the former BSN did when it became Danone).
That said, for Kraft to call the new snacks group Cadbury would have raised even more eyebrows than the decision to move away from its conglomerate model to two pure-play businesses did.
However, moving away from the new name, and further discussion of the make-up of the two soon-to-be created companies this week suggests that, further down the line, there could be more changes for the new firms.
The Mondelez International will house the whole of Kraft's European unit as well as its current snacks and confectionery businesses from around the world. And that European business includes brands Dairylea cheese, Miracoli pastas and sauces and Kenco coffee - brands that don't appear to fit with the US food giant's decision to create a global snacks powerhouse.
Speaking at the Consumer Analyst Group of Europe investment conference in London this week, Spayne Lindsay co-founder Tom Lindsay suggested Kraft could look to offload to some of its European grocery assets instead of keeping them alongside the likes of Cadbury and Oreo.
And what of the second company to be formed by Kraft's split. The new North American grocery business is looking to focus on the centre of the store. Driving margins will be a key priority but the new company (which will keep the Kraft name) could look to make bolt-on acquisitions - and could Reckitt Benckiser's French's mustard brand (deemed non-core by the consumer goods giant) be a potential target?
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