Kraft Heinz’s Bernardo Hees is the latest CEO to announce his exit from a food company, as the industry goes through unprecedented turnover and challenges.

The parade of departures includes Kellogg’s John Bryant, Mondelez International’s Irene Rosenfeld and Campbell Soup’s Denise Morrison. When Morrison left last May, she capped a streak of 15 CEO departures since the beginning of 2016.

The longest-tenured food company CEO is Joe Sanderson, the third-generation leader of poultry company Sanderson Farms.

Irwin Simon, the founder and chief of Hain Celestial Group, had been the second-longest tenured CEO when he left in June. Simon, who held the top job at the natural foods company since 1993, stepped down as the company came under activist pressure.

Now, Sean Connolly, Conagra’s CEO, holds that title. He joined the company in 2015.

The CEO merry-go-round underscores the challenges iconic food brands are facing. These grocery store staples are struggling to create growth in the face of upstart rivals, rapidly changing consumer trends and their own slower-paced cultures. If they want to buy growth, there are limited and expensive options.

These executives are also victims of their predecessors’ successes. The scale that once gave CEOs power at the grocery store and yielded cost savings now makes it harder to casually shift away from legacy businesses. Campbell could cut down on soup production and Kellogg its cereal business, but both would still have the fixed costs associated with these businesses.

It is, therefore, a challenge for a CEO to gather support from a company to shift its focus from namesake moneymakers to bet on growth. That’s even in the face of packaged food company sales slowing last year to 1.2%, according to Euromonitor.



Source link