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Kraft Blows It with the Mondelez Spin-off Name

March 22, 2012 | About:
I’ve long been a critic of ridiculous, made-up company names. In fact, I just complained again about it in a GuruFocus article a few days ago about ITT, Exelis (XLS) and Xylem (XYL). Kraft (KFT) provided new fodder yesterday with the release of the name for their spin-off: Mondelez. There should be a line above the last “e” as well, but that won’t show up in these edits. That line is known as a macron and indicates that the sound should be long, as in "puh-leez." So, Mondelez should be pronounced mohn-dah-leez.

If Mondelez is accepted by shareholders in a May 23 vote, and I hope to God it’s not, the ticker symbol will be MDLZ. This spin-off company will run the global snacks business. Most of those products are well-known names, so even if the Mondelez name is approved, hopefully we won’t have to hear about it very often. Consumers may not notice at all.

Here’s what Kraft executives had to say about the new name:

Soon to be Chairman and CEO, Irene Rosenfeld:

"For the new global snacks company, we wanted to find a new name that could serve as an umbrella for our iconic brands, reinforce the truly global nature of this business and build on our higher purpose – to ‘make today delicious.’ Mondelez perfectly captures the idea of a ‘delicious world’ and will serve as a solid foundation for the strong relationships we want to create with our consumers, customers, employees and shareholders."

Chief Marketing Officer Mary Beth West:

"It’s quite a job for a single word to capture everything about what we want the new global snacks company to stand for. … “I’m thrilled with the name Mondelez International. It’s interesting, unique and captures a big idea – just the way the snacks we make can take small moments in our lives and turn them into something bigger, brighter and more joyful."

It certainly is quite a job for a single word to capture all of that, which is why it’s not possible for a single word to do that. This is another example of branders run amok. The reputation of a company takes years to build and is based on management’s ability to set a strong vision for the company, stay focused on that vision, and execute in a way that reflects the values that the company wants to promote. Words mean little. Actions much.

I had to laugh when reading The Wall Street Journal article about Kraft’s name change. The author’s name is Julie Jargon. That appears to be her real name, judging by this website. I wouldn’t be surprised if The Journal assigned the story to her as a subtle joke.

If the company truly wanted to create a name that encapsulated “everything about what we want [in] the new global snacks company,” let me suggest this name, pro bono: International Snacks. Consumers and investors will never have to wonder where or what the company sells.

About the author:

Steven Kiel
Steven Kiel is the president and chief investment officer for Arquitos Capital Management, a Virginia-based investment management firm. He is a graduate of George Mason School of Law and a captain in the Army Reserves. He manages two spoke funds, The Freedom Fund, a value-oriented portfolio, and The Hayek Fund, a portfolio dedicated to free market principles. He can be contacted at steven.kiel@arquitos.com or through the firm's website at www.arquitos.com.

Visit Steven Kiel's Website


Rating: 4.1/5 (17 votes)

Comments

budlab
Budlab - 2 years ago


At Kraft, it may be time for top management to step down. If they could not manage food and snacks within the same company, are they truly "able and trustworthy" managers?
eh?
Eh? - 2 years ago
While I appreciate the mocking of truly ridiculous names (and I know, a bit late to the party here, but I get around to reading things), perhaps some research in the origins of 'xylem' would have served you well. Xylem is actually a biological term for one of the two transport tissues in higher level vascular plants, which, coincidentally, transports water. In my mind, a rather fitting name for a company that deals with water.

http://en.wikipedia.org/wiki/Xylem
hardrive118
Hardrive118 - 2 years ago
How about, if you absolutely gotta split the company, use the name "Kraft International". The Kraft name has a lot of brand loyalty in my opinion. I voted my shares against the name Mondelez. To me it invokes the idea "big lesbian".

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