Roger Deromedi
1953–



Chief executive officer, Kraft Foods

Nationality: American.

Born: 1953, in California.

Education: Vanderbilt University, BA, 1975; Stanford Graduate School of Business, MBA, 1977.

Family: Married Sandra (maiden name unknown); children: three.

Career: General Foods, 1977–1988, brand manager; Kraft Foods, 1988–1989, vice president, corporate development; 1989–1992, vice president, marketing, grocery products and retail cheese; 1992–1993, executive vice president and general manager, specialty products; 1993–1995, executive vice president and general manager, U.S. cheese division; 1995, executive vice president and area director for France, Iberia, and Benelux; Kraft Foods International, 1995–1998, executive vice president; Kraft Jacobs Suchard, 1995–1998, president, Western Europe; Kraft Foods International, 1998–1999, group vice president and president, Asia Pacific; 1999–2003, president and chief executive officer; Kraft Foods, 2001–2003, co-chief executive officer; 2003–, chief executive officer.

Address: Kraft Foods, Three Lakes Drive, Northfield, Illinois 60093; http://www.kraft.com.

■ Roger Deromedi worked his way up in the food industry to become CEO of Kraft Foods, the largest food company in North America and the second largest in the world. As coCEO in 2001 he helped the company go public. When he became CEO in 2003 Deromedi moved quickly to restructure the organization, increase marketing, and streamline its manufacturing processes. A sharp finance man and strategic planner, Deromedi implemented cost-cutting measures using data analysis.

CLIMBING THE FOOD LADDER

Born and raised in California, Deromedi was graduated from Vanderbilt University with a degree in economics and

Roger Deromedi. © Reuters NewMedia Inc./Corbis.
Roger Deromedi. ©
Reuters NewMedia Inc./Corbis
.

mathematics and earned his master of business administration degree at the Stanford Graduate School of Business. He began his career as an entry-level brand manager at General Foods. When Kraft acquired General Foods in 1988, Deromedi became vice president for corporate development. He was in charge of formulating a strategy for fat-free products.

Founded in 1916 when J. L. Kraft obtained a patent on processed cheese, by 2004 Kraft Foods was operating in 68 countries and had more than 100,000 employees. Kraft products were sold in more than 150 countries and could be found in 99 percent of American households. Cheese remained Kraft's biggest product, automated production facilities producing more than two billion pounds annually.

In the early 1990s Deromedi made his name in Kraft's specialty products and cheese divisions. He began marketing dairy products to niche markets, particularly older consumers, women working outside the home, and children. He boosted sales with low-investment alterations. Deromedi told Sarah Ellison of the Wall Street Journal , "We've had great success just slicing our chunks of cheese, or adding reclosable packaging" (May 21, 2004). When low-carbohydrate diets became the fashion, Deromedi changed the cheese labeling. He told Ellison, "The products have always been low in carbs. It's not like we've had to create a whole new something to get at that."

BECOMING CO-CEO

In 1995 Deromedi moved to Kraft Foods International, becoming president and CEO in 1999. He expanded Kraft's overseas operations and integrated more than 30 newly acquired European businesses. In 2001 Deromedi became coCEO of Kraft Foods along with Betsy Holden. Although their salaries were equal, Holden, as CEO of Kraft North America, was responsible for approximately three-fourths of the company's business. As CEO in charge of Kraft International, Deromedi was responsible for $9 billion in sales and more than 53,000 employees. The management arrangement was unusual, and many analysts considered it unstable. Dennis E. Logue, a management professor at Dartmouth College's Tuck School of Business, told Theo Francis and Shelly Branch of the Wall Street Journal , "I think it's a nutso idea. Guys don't get to be CEOs because they like to share" (April 11, 2001). In one of the largest initial public offerings (IPOs) in history, Deromedi and Holden led Kraft's IPO of 16 percent of the company. Kraft's parent company, the Altria Group (formerly Phillip Morris Companies), retained control with 84 percent of the shares.

Kraft had trouble keeping up with the rapidly changing American diet. Betting on the popularity of high-fat snack foods, Kraft bought Nabisco in 2000, just as concerns over obesity and other food-related health issues came to the fore. Consumers demanded more healthful, better-tasting, and more sophisticated foods and were increasingly suspicious of processed foods. Kraft began to buy its way into the gourmet and organic food markets. In July 2003, in response to the threat of obesity lawsuits, Kraft announced that it would promote healthier lifestyles, change some recipes, reduce some single-serving portions, and stop promoting snack foods in schools.

PROMOTED TO SOLE CEO

Kraft continued to lose market share and miss its earnings projections. Holden took the blame. On December 16, 2003, the chairman of the Altria Group demoted her, and Deromedi became the sole CEO of Kraft. In January 2004 Deromedi announced his four-point sustainable growth plan for a leaner, more efficient company. He would invest heavily in "new and improved" brand-name products and advertising while readjusting Kraft's product line to match consumer and demographic trends and expand globally. He would cut costs and improve asset utilization to fund growth and acquire new companies. He announced that over the next three years Kraft would cut six thousand jobs and close 20 of its 197 plants. He also lowered the targets for long-term profit growth.

Deromedi also announced a major restructuring of the company, designed to improve international operations and expand global marketing. The separate international and domestic businesses were reorganized into global product units. Deromedi also launched a new Kraft product line—a special coffeemaker with coffee packets. Many analysts remained skeptical about Deromedi's ability to turn the company around.

MANAGEMENT STYLE

Despite his low-key manner, Deromedi was direct and blunt. Kraft insiders referred to him as "Skeletor" because of his stern and succinct style and his sharp physical features. Deromedi was passionate about work. During his progression to the top, Deromedi was flexible and took advantage of opportunities but was not overly career oriented. As a manager Deromedi rewarded those who focused more on the company than on their careers. He treated employees with integrity and recognized the importance of balancing work and family, particularly when moving executives globally. In 2003 Deromedi told Vic Bhatia and Dyasmin Zarolia of the Stanford Graduate School of Business that the most important thing was to love the job, love the organization, and have fun.

Deromedi defined leadership for Bhatia and Zarolia as "the ability to communicate a vision and gain commitment to it." The vision must be both inspiring and well-grounded in the business. It required effective oral and written communication and listening skills to adapt leadership to employee, supplier, and customer needs. Deromedi believed in supportive mentoring and leadership by example. While respecting local culture, Deromedi claimed that an international business leader was required to promote change. Deromedi was known for attention to detail. James Kilts, his former boss and mentor, told Delroy Alexander of the Chicago Tribune : "What he is very good at is taking those complexities and simplifying them so the organization can understand where he's headed. Roger has the ability to see the big picture but to drive right down to the execution level and get it done" (February 10, 2004).

See also entries on General Foods Corp. and Kraft Foods Inc. in International Directory of Company Histories .

sources for further information

Alexander, Delroy, "Kraft Skipper Making Waves," Chicago Tribune , February 10, 2004.

Bhatia, Vic, and Dyasmin Zarolia, "Leadership and Vision Are a Big Part of the Job," Alumni Profiles , Stanford Graduate School of Business, http://www.gsb.stanford.edu/news/profiles/deromedi.shtml .

Ellison, Sarah, "Eating Up: As Shoppers Grow Finicky, Big Food Has Big Problems," Wall Street Journal , May 21, 2004.

Francis, Theo, and Shelly Branch, "Amid Weak IPO Market, Kraft Is a Big Cheese," Wall Street Journal , April 11, 2001.

—Margaret Alic

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