This last year has been a big one for Kraft Foods, and the year ahead promises to be even bigger.
Last summer, the manufacturer announced its intention to create two independent public companies — “a high-growth global snacks company and a high-margin North American grocery business.” Those efforts are under way.
“2011 was an outstanding year for our company,” Kraft Foods’ Chairman and Chief Executive Officer Irene Rosenfeld told SN. “We had strong financial results and made tremendous progress integrating Cadbury, while laying out our plans to separate Kraft into two independent companies.
“This milestone year was the culmination of years of work to improve the trajectory of our base business, increase our exposure to faster-growing categories, geographies and channels, and create a sustainable virtuous cycle of growth.”
The Northfield, Ill.-based company’s success so far has put it in an excellent position to create two new companies, each with its own strategies and operating procedures, Rosenfeld said.
With such endeavors, the company is pursuing two objectives — tightening its focus and, at the same time, spreading out globally, industry observers told SN.
“Through Irene Rosenfeld’s leadership, the company is achieving two critical goals — becoming both more focused, which splitting into two companies is achieving, and more global, allowing them to look for unique opportunities for growth on a more global basis,” Neil Stern, senior partner, McMillanDoolittle, Chicago, told SN.
Stern sees both businesses as poised for leadership in their respective categories, he said.
Rosenfeld commented on Kraft’s next steps to build the independent companies.
“Later this year, we’ll spin off our North American grocery operations into an independent public company with about $19 billion in annual revenue,” she said. “This company will take the Kraft Foods name and, from day one, it will be one of the largest and most admired food companies in North America and a leader in marketing and innovation, led by brands such as Kraft, Oscar Mayer, Maxwell House and Planters.”
Meanwhile, the company’s iconic and best-selling Oreo cookie turned 100 this year and has shown no slowdown in sales. Indeed, it hit the $2 billion sales mark, and is expected to reach $1 billion in annual revenue in developing markets alone by the end of this year, the company said in a statement this spring.
Oreos are undergoing some changes to match to consumers’ tastes in other countries. For instance, there is green-tea-Oreo ice cream in China and a peanut filling in Indonesia.
“Our snacks brands and our overseas portfolio will comprise a $35 billion global snacking company,” Rosenfeld said.