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Kraft is splitting into two different companies: fine. Kraft is renaming the corporate division of the spinoff to reduce confusion: fine. Kraft had to include a phonetic spelling of its new brand name in the launch release: major red flag.
Kraft has decided to rename its global snacks company “Mondelez,” which is “a newly coined word that evokes the idea of ‘delicious world,” according to the press release. Apparently it’s a combination of the words "monde," derived from the Latin for "world," and "deliz," short for "delicious.” I am not going to argue what it evokes in my mind in this column (although I’m tempted), but the big red flag is the fact that they had to provide this:
“Kraft Foods Inc. (NYSE:KFT) today announced plans to change its corporate name to Mondelez International, Inc. "Mondelez" (pronounced mohn-dah-LEEZ')…”
If you have to provide a phonetic spelling of your new brand name when releasing it to the public, you’re in big trouble. In general, you shouldn’t have a brand name that can’t be easily pronounced, or spelled, unless it is the name of the founder. On top of that, what is the value in coining a new word that most consumers will never hear? Unlike what is believed in some of the CNN.com comments on this story, Kraft isn’t doing away with the names like Nabisco and Maxwell House that consumers love. Most consumers will never know the difference. So why the fuss?
For shareholders, the rebrand is now buying a lot more than a name change: it’s buying a years-long process of promoting that name to effectively “coin a new word.” That is what all the fuss is about. With a global portfolio of some of the most trusted brands available, shareholders are now on the hook for a rebranding strategy that could have been accomplished more effectively (and cheaply) by leveraging one of their existing brands or choosing a generic name.
Unfortunately, it also calls the leadership into question when many were already questioning the value of Kraft’s split. At a time when shareholder confidence is key, the company may have handed detractors a perfect, public example of mismanagement. That’s not something Kraft brass needs on their hands right now.
So what’s the way out for Mondelez? It’s up to the board to reject the name and for the company to quietly rebrand its new “brand house” to something that makes a bit more sense. Holding companies are not designed to be sexy: they are designed to create efficiency among multiple separate entities. In Kraft’s case, that means multiple snack lines. What do you think the new business unit should be called?
Jim Nichols is Vice President – Digital at Stern + Associates, a full-service communications firm that fuses the best of public relations, traditional media, digital, marketing and direct engagement strategies through its Connected Communications® approach. He can be reached at jim@sternassociates.com
