People have to eat, even in a recession. So you might think that Kraft CEO Irene Rosenfeld has a cushy gig selling some of the world's most iconic packaged comfort foods.
Kraft says that 99% of the nation's homes have at least one of its products, which include Oreos, Philadelphia Cream Cheese, Ritz crackers, Kool-Aid, Maxwell House coffee, Oscar Mayer lunch meats and DiGiorno pizza.
But since 2006 — when she landed the top job at Kraft after its spinoff from Altria Group (formerly Philip Morris) — Rosenfeld, 55, has struggled to reinvigorate a giant that was losing market share at a time of rising costs.
One of just six female CEOs at the top 500 corporations, the 27-year food-industry veteran made innovation a top priority. She introduced products including Bagel-fuls (a frozen bagel prefilled with cream cheese) and Oreo Cakesters (a soft version of the classic cookie), while selling sleepier lines including Post cereals.
Her moves impressed legendary investor Warren Buffett, who became Kraft's biggest shareholder in late 2007 when he bought 8.6% of its stock. This year Kraft shares have fallen 18%, but that is less than half the 39% drop in the benchmark Standard & Poor's 500 index.
Now, the USA's largest food company, expected to generate more than $40 billion in revenue this year, is grappling with a weak economy and questions about the industry's contribution to childhood obesity.
Rosenfeld shared her thoughts about her company, the economy and leadership with USA TODAY's David Lieberman at the ninth USA TODAY CEO Forum in conjunction with Duke University's Fuqua School of Business.
The interview took place in front of an audience. Edited for length and clarity, here are Rosenfeld's thoughts on:
Q: Will you continue to spend money on advertising, which may require you to keep prices up, or would it be better for you to discount?
A: We have never looked at pricing as a means of affording our advertising. Our prices will go up and down as the cost of our ingredients goes up and down. But that will not preclude our investment in our brands.
Q: Are you changing the branding messages?
A: We've definitely shifted to more of a value story. So far, it's serving us quite well.
Q: Where do you get the biggest bang for your buck in advertising?
A: As we continue to look for opportunities for a mass message, TV is one of the cheapest vehicles around.
Increasingly, though, that's not where people are spending their time. I had an opportunity at lunch today to talk with a number of students, and increasingly they're turning to digital media and the Internet for their information. Even in developing markets, we're seeing the growth of digital communication is proceeding at a very rapid pace. And that's where we're putting our money.
Q: Consumers looking for value may prefer less-expensive store brands. Is that an issue for you?
A: There's no question that consumers are looking for value today. Our obligation is to ensure that the products that we are providing offer them adequate value, and so we have spent the last couple of years investing in the quality of our brands, the marketing of our brands and our innovation pipeline.
Q: Will this continue to be a threat?
A: Private label's been a pretty significant phenomenon in many markets outside the U.S. for a number of years. In markets like Europe and Canada, for example, the market share of private label is upward of 30%.