Kraft Foods Group Inc said on Thursday that its chief financial officer would leave her role and two other senior executives would depart from the company, marking the first major changes at the maker of Velveeta cheese and Oscar Mayer meats since its board chairman took over as chief executive in December.
Kraft said the shakeup, which includes the creation of a "vice president of growth initiatives", was aimed at accelerating the pace of change at the company. In December, the company announced that its chairman John Cahill would replace Chief Executive Tony Vernon who stepped down. In his first earnings conference call since he took over as CEO, Cahill said, "It's clear that our world has changed and our consumers have changed, but our company has not changed enough."
Cahill declined to give specifics on his strategy until the second quarter of the year but said the company would focus on developing products based on consumer insights and spend on more efficient advertising. The company has been battling sluggish demand for its older brands in the United States, where many consumers want fresher foods with higher quality ingredients.
As part of the change, Chief Financial Officer Teri List-Stoll will be leaving her role effective February 28. Chief Marketing Officer Deanie Elsner and Chuck Davis, executive vice president of research and development and quality and innovation, will leave the company. Jane Hilk, president of the enhancers and snack nuts division, has been appointed interim chief marketing officer.
Kraft said the finance division would report to Cahill until a CFO was appointed. List-Stoll, who joined Kraft in September 2013, will stay on as a senior adviser to ensure a smooth transition. "Three people after this guy has been on the job 50 plus days seems like an awful quick, swift move," said Brian Yarbrough, analyst at Edward Jones. "But I think his whole point is they're not innovating fast enough, and they're not coming out with the right type of marketing."
Analysts said investors also will be watching Cahill's approach to Kraft's portfolio regarding potential acquisitions and divestitures. "We have wonderful brands but they are not all created equal," Cahill said. "At the end of the day our brands are phenomenal brands as they are, and so, our first and foremost focus will be on making them work."
When asked about his approach on cost-cutting, Cahill said, "As I see it today, there remains plenty of opportunity to take costs out without jeopardising in any way our top line." Kraft's shares were down 1.9 percent at $64.90 in extended trading on Thursday. Chris Kempczinski, who currently leads the company's Canada unit, will assume an expanded role as executive vice president of growth initiatives and president of international operations.
He will work on innovation and strategy that will include mergers and acquisitions, Kraft said. George Zoghbi, previously vice chairman of operations, R&D, sales and strategy, was appointed chief operating officer. Kraft reported a net loss of $398 million, or 68 cents per share, for the fourth quarter ended December 27, compared with a profit of $931 million, or $1.54 per share a year earlier. The company took a charge of $1.36 billion related to post-employment benefit plans, mainly due to a combination of lower discount rates and updated mortality assumptions. Revenue rose 2.2 percent to $4.69 billion.