FDBusiness.com

Cadbury Helps Kraft to Hit Sweet Spot

 Breaking News
  • Royal Unibrew Completes Acquisition of French Lemonade Business Royal Unibrew, the Denmark-based beverages group, has completed the acquisition of Etablissements Geyer Fréres for an enterprise value of DKr660 million (€88.5 million) financed by bank debt. The acquisition of Etablissements Geyer Fréres will give Royal Unibrew increased access to the French soft drinks market and will further strengthen its export portfolio. Employing about 100 [...]...
  • Private Label Outperforms FMCG Brands in Europe Private label continues to grow across Europe and is now outperforming brands in the majority of markets measured by big data and technology expert for consumer FMCG industries, IRI in its analysis of private label performance across eight major Western economies markets (UK, France, Germany, Greece, Italy, Spain, Netherlands and the US) during 2017. Growing +4% year on [...]...
  • Meat & Poultry – Future-proof For Success The meat market remains fast-moving and competitive. As part of this processors and retailers are always looking for a point of differentiation. As well as new product development, this can mean new pack formats. Convenience remains a major driver here but this has to be matched by the ability to maintain product quality and freshness [...]...
  • Ready Meals – Not Ready For the Future New research (1) published by Eating Better, a powerful alliance of more than 50 organisations, shows that supermarkets need to shake up their ready meal ranges. They are not catering for the growing number of flexitarian customers who are cutting back on their meat eating for their health and the health of the planet (2). [...]...
  • Top 100 Largest Spirits Brands Revealed The world’s most popular alcoholic drink in 2017 was the South Korean soju brand Jinro, owned by Hite-Jinro, according to the IWSR Real 100, the definitive ranking of the world’s largest spirits brands by volume. Selling almost 76m nine-litre cases, Jinro retains its number one position from last year, and once again by a staggering [...]...

Cadbury Helps Kraft to Hit Sweet Spot

Cadbury Helps Kraft to Hit Sweet Spot
September 16
10:06 2010

Kraft Foods has just outlined its new global development strategy and expects to deliver organic revenue growth of 5% or more, margins in the mid- to high-teens and earnings per share (EPS) growth of 9% to 11%. Following its $18.4b acquisition of Cadbury earlier this year, Kraft Foods became the undisputed world leader in snacks, a high-growth, high-margin category that now accounts for more than half of the group’s total revenue.

The enlarged Kraft Foods has an exceptional portfolio of global snacks power brands – led by Milka and Cadbury chocolates, Oreo and LU biscuits and Trident gum – with leading market shares in every major region, a full pipeline of innovation and a clear opportunity to grow its presence in what Kraft describes as the point-of-purchase ‘hot zone’.

Complementing the US-based food giant’s snacks portfolio are well-loved iconic regional and local brands in the beverage, grocery, cheese and convenient meals categories. Roughly 80% of these ‘heritage’ brands hold number one or number two positions in their respective categories and are household names among consumers who tend to be extremely brand-loyal. They also carry high margins and generate strong cash flow.

Irene Rosenfeld, chairman and chief executive of Kraft Foods.

“Today’s Kraft Foods is a global snacks powerhouse with an unrivaled portfolio of leading regional and local brands,” points out Irene Rosenfeld, chairman and chief executive of Kraft Foods. “This unique and complementary combination, together with our significant presence in high-growth developing markets, will deliver consistent growth in the top tier of our peer group.”

The combination of Kraft Foods and Cadbury provides the scale necessary to grow sales and distribution in new and existing markets, delivering a projected $1b in incremental revenue synergies. Kraft also expects to realise $750m of cost savings from integrating Cadbury by 2013.

More than half of Kraft Foods’ revenue now comes from markets outside of North America, such as Brazil, China, India and Mexico, where GDP and demand growth are strongest. Accordingly, by 2013, the proportion of business in developing markets will increase from a quarter of total revenue to roughly one-third.

Additional savings over the next three years from procurement, manufacturing and logistics will drive productivity gains in excess of 4% of cost of goods sold, according to Kraft Foods. These productivity gains, combined with flat overhead growth and pricing to offset input costs, will contribute to the expansion of gross margin.

“At Kraft Foods, we’re hitting our sweet spot,” she adds. “We’ve built a solid foundation for growth. By leveraging our scale, making strategic investments in marketing, sales and innovation and establishing a world-class cost structure, we will take our performance to the next level.”

About Author

colin

colin

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 5, 2018Int'l Food Products and Processing Technologies Exhibition (WorldFood Istanbul)
  • September 15, 2018iba
  • September 25, 2018PPMA Show 2018
  • September 27, 2018Int'l Fruit Show (eurofruit)
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements