Kraft’s Name Change to Mondelez Leaves Experts Guessing

By David Welch - Mar 22, 2012 3:19 AM GMT+0700

Is it pronounced mon-dah-lay? Mon- dah-lezz? Oh, it’s mohn-dah-LEEZ.

That, according to corporate naming expert Nina Beckhardt, is the first problem with Mondelez, the name Kraft Foods Inc. (KFT) plans to give its global snacks business after spinning off its U.S. grocery unit this year.

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Photographer: Brent Murray

The second problem: What does it mean? The name is a combination of the word “monde,” derived from the Latin for “world,” and “delez,” an expression for delicious. The name might suit a company commanding $32 billion in revenue from Beijing to Berlin if the connection was apparent. It’s not, Beckhardt said.

“The public gets sick of compressed words if they aren’t intuitive,” said Beckhardt, founder and president of The Naming Group, a New York-based firm that has named shoes for Puma SE (PUM) and high-end stereos for Sony Corp. (6758) “When the pronunciation isn’t accessible, it looks bad. It’s not intuitive.”

Mondelez isn’t the first corporate name to generate confusion. When Andersen Consulting switched to Accenture in 2001, pundits wondered why they would leave behind such name recognition. The move paid off later when Arthur Andersen accounting -- once under the same corporate umbrella as the consulting firm -- became embroiled in the Enron Corp. (ENRNQ) accounting scandal.

Philip Morris changed its name to Altria Group Inc. (MO), claiming that the Latin word “altus,” suggested high performance. The name also disassociated the company from the baggage of tobacco litigation and health concerns.

Corporate Versus Brand

Corporate name changes tend to have less of an impact, either good or bad, than brand name changes, Beckhardt said. That could be good news for Northfield, Illinois-based Kraft, which plans to use Mondelez strictly on the back of packages of such snack foods as Oreo cookies and Newtons snacks. After the split, the snacks business will market those brands directly to consumers and Mondelez will remain in the background.

Establishing the corporate name will take time, said Sharon Shedroff, founder of San Diego consulting firm Strategic Vision Inc. The Mondelez name may be understood in European countries where Latin-based languages are spoken. People speaking other languages will have a tougher time figuring it out.

“Until the brand is established, it will be difficult for people to give it meaning in the U.S. and probably in Asia,” Shedroff said in a phone interview. “Brands under it, like Oreo, could lend credibility to Mondelez.”

Kraft Groceries

Kraft’s grocery business will retain the Kraft name as it continues selling cheese and other items that have borne founder J.L. Kraft’s moniker since he started as a wholesaler in 1903.

Nissan Motor Co. (7201)’s decision to put its corporate name on Datsun cars sold in the U.S. in 1981 was a disaster, said Jim Hall, principal of 2953 Analytics in Birmingham, Michigan.

Americans liked the Datsun 510 sedan and 240Z sports car, and Datsun was the second-best selling Japanese brand in the U.S. behind Toyota Motor Corp. (7203) at the time. The change to Nissan caused confusion, Hall said. Today, Nissan trails Toyota and Honda Motor Co. (7267)

Kraft asked employees to suggest names, and more than 1,000 participated, submitting more than 1,700 potential names, the company said. The inspiration for Mondelez came from two employees, one in Europe and another in North America.

Kraft realizes that the pronunciation of Mondelez isn’t easily picked up by everyone, said Michael Mitchell, a company spokesman. People will figure it out before too long, he said.

“It will take a while to get used to,” Mitchell said in a phone interview. “People will learn how to pronounce it, and it will be good.”

To contact the reporter on this story: David Welch in Detroit at dwelch12@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net