August 16, 2017 – Mondelez International, known for brands like Oreo cookies, Trident gum and Ritz crackers, has appointed Dirk Van de Put as its new president and CEO. The company enlisted Heidrick & Struggles to fill its top post. With the snack-food producer’s revenues declining in recent years, activist investors have been vocal in their dissatisfaction with longtime CEO and chairman Irene Rosenfeld.
Ms. Rosenfeld will continue as chairman of the board until March 31, when she retires and Mr. Van de Put takes over.
“On behalf of the entire Mondelez International board, we want to welcome Dirk and are excited to begin working with him to lead the company through its next chapter of growth,” said Mark Ketchum, lead independent director of Deerfield, IL-based Mondelez. “Our thorough, multi-year succession process has identified Dirk as the right leader with a distinct combination of skills and industry experience necessary to succeed as our next CEO.” He said the search process was “global in nature” and that the company’s hiring committee “thoroughly considered numerous highly talented internal and external candidates before making our final decision.”
With the rise of consumers turning to more nutritious and healthy foods, Mondelez’s revenue fell more than 12 percent last year. In response, the company launched Vea, a brand that targets health-minded consumers. Aimed squarely at Millennials, Vea products include crunch bars, crisps and seed crackers. “Consumers around the world are interested in healthier products for a better lifestyle,” said Ms. Rosenfeld.
Quarterly sales have fallen five percent to $5.99 billion due in large part to low demand for its primary brands, such as Cadbury Dairy Milk, Milka chocolate and Oreo cookies, especially in North America. A cyber attack on its systems, which led to shipping and invoicing delays, also affected revenue.
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Mondelez, which has a market value of nearly $70 billion, recently sought to acquire Hershey for $23 billion. Hershey rejected the offer. Rumors are now circulating that the company could be taken over by one of its rivals, such as the Kraft Heinz Co.
Some have estimated that the consumer packaged goods sector is valued at upwards of $2 trillion. And while that’s an impressive number, the industry also has serious challenges. Highly competitive markets, powerful retailers and decreasing margins plague the industry. Having the right leader in place is essential.
Mr. Van de Put brings nearly 30 years of experience in the food and consumer package industry to his new role. He joins Mondelez from McCain Foods, a $7.3 billion privately held Canadian company that is the largest marketer and manufacturer of frozen french fries, potato specialties and appetizers with sales in more than 160 countries. During his six-year tenure as CEO, he grew net sales by more than 50 percent, generating more than 75 percent of that growth organically, with EBITDA growing double digits each of the last six years. Prior to joining McCain, Mr. Van de Put held executive positions with Novartis, Groupe Danone, the Coca-Cola Co. and Mars Inc.
“The board and I are confident that Dirk Van de Put is the right leader to take us forward,” said Ms. Rosenfeld. “He is a seasoned global CEO, having lived and worked on three different continents, with deep experience and expertise in all critical business and commercial operations in both emerging and developed markets.”
As CEO Turnover Rises, Outsiders Are Given a Closer Look
Over the past several years more big companies have been deliberately choosing their new CEO from outside of the company as part of a planned succession, an indication that hiring an outsider has become more of an intentional leadership choice than a necessity.
“Throughout his career, Dirk has had a proven track record of driving top-line and category growth, while at the same time improving cost structures and profitability,” she said. “And he has achieved these results with a values-based leadership style and steadfast focus on people.”
Why Consider Outsiders
A PwC report found that over the past several years more big companies have been deliberately choosing their new CEO from outside of the company as part of a planned succession, an indication that hiring an outsider has become more of an intentional leadership choice than a necessity.
Outsiders accounted for 22 percent of all CEOs brought in via a planned succession between 2012 and 2016, up from 14 percent in the 2004 to 2007 period, said the report. In addition, almost three quarters of all outsider CEOs were brought in during planned successions during that same period, up from 43 percent in 2004 through 2007.
The majority of companies, however, have continued to promote insiders to the CEO position, and the study’s authors believe this will remain the preferred succession planning practice (77 percent insiders versus 23 percent outsiders in 2016). Outsider CEOs, for their part, have caught up and closed a performance gap that the study previously found between outsider and insider CEOs, possibly strengthening the case for recruiting a leader from outside the company.
“Hiring an executive from outside a company to serve as CEO used to be seen as a last resort,” said Per-Ola Karlsson, partner and leader of Strategy&’s organization and leadership practice for PwC Middle East. “That is not the case anymore with the disruptive market-related changes that companies are facing today.”
While an internal CEO candidate may have an excellent record of achieving the business goals a company has pursued in the past, Mr. Karlsson said boards recognize that insiders might lack the skills needed to lead and see through the changes necessary to win in the future.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media