Category Management: Kraft Foods

ROBERT VOSBURGH

• A leader in looking at new and existing products from multiple attitudes.
• Leverages authorized Center Store products in numerous total-store promotions.
• Sharpened digital capabilities link a retailer's promotional calendar to specific Kraft recipes and serving ideas.

Retailers have plenty of opportunity to choose from in selling the many brands of Kraft Foods. The packaged goods and confectionery company counts among its iconic brands Oscar Mayer, Nabisco, Cadbury, Maxwell House, Philadelphia, Tang and others.

Kraft uses its broad portfolio to tie in total-store solutions.

That kind of brand experience is an invaluable resource for retailers looking for more comprehensive, total-store solutions that deliver a true ROI.

“We have a long and growing list of single-brand and multi-brand initiatives to ‘market’ our brands in-store while remaining completely in sync with the retailers' focus areas,” said Laura McCorvie, senior vice president of customer growth and shopper marketing for the Northfield, Ill.-based company.

Kraft empowers its category management capabilities with a retailer view of total basket size (in revenue, margin and number of items), store traffic, share of wallet among shoppers and shopper loyalty trends. The fusion of Kraft's insights and the retailer's data produces potent programs that earned Kraft top honors in Kantar Retail's most recent Category Leadership Benchmarking Study.

“They're especially good at partnering and development right from the beginning, planning additional research, customizing programs for a particular customer and engaging at several different levels and functions,” noted Ginny Valkenburgh, Kantar's senior vice president.

As a leading CPG company, Kraft's core is Center Store. Yet, its category management programs often revolve around the perimeter fresh departments — an area supermarket retailers are leveraging to propel differentiation and loyalty.

“When we think about the Kraft Foods portfolio relative to those retailer interests, we're able to go in with traffic- and basket-building programs that build on our mutual interests of driving revenue and share,” McCorvie said.

Kraft starts with space planning. Having the right-sized and right-assorted space also generally means fewer out-of-stocks and smoother supply chains, she noted. The company sets goals at the retailer or banner level, geographic level and store level. In some cases, Kraft can further “slice and dice” by specific shopper groups or certain purchase patterns.

Successful case histories:

“These initiatives put our brands in a new context; it's not our brand sitting next to Competitor X, since we are merchandising outside our traditional confined shelf space in Center Store,” McCorvie explained.

It used to be enough for CPG manufacturers to know core consumers and target audiences inside out, or understand their motivations. While those measures still apply, market conditions have forced retailers to develop their own positionings, brand promises and shopper targets that largely parallel a branded manufacturer's. Seeing this, Kraft has built a category management framework that leverages the retailer's own growth mechanisms, matches the company's own portfolio and capabilities and delivers the solution directly to their shoppers.

“Kraft looks at more of the total store just because they can cover so much of the store,” Kantar's Valkenburgh said. “They know their shoppers in a much deeper sense than just from a single category.”