Kraft resets its focus to drive down costs
portfolio, and exploit its sales capabilities, in a bid to make the
company more profitable, the company's top executive stated at a
conference this week.
Irene Rosenfeld, Kraft's chairman and chief executive officer, reported that after the first six months of executing this long-term strategy the company remains on track to deliver $1 billion in savings from its total $3 billion, multi-year restructuring programme. The company is spending an incremental $300m to $400m this year on improving product quality, developing new products and increased marketing. Most of the money is being spent during the second half of the year. In North America, the company is focusing its incremental investments on macaroni and cheese producs, pizza, biscuits, cheese and coffee. In the EU the company is focusing on its chocolate and coffee brands. In developing markets, Kraft is coupling this approach with expanded distribution in traditional trade channels in key markets. Kraft expects to complete the roll-out of the new structure by early 2008. "We're spending on programs to accelerate our revenue growth as quickly as possible, deliver sequential improvement in our market share performance and set the stage for improved profit margins beginning in 2008," Rosenfeld said. "Our key 2007 initiatives are driving organic growth in every geography. We're stepping-up growth in North America, changing the growth trajectory of the EU after years of decline and maintaining our momentum in developing markets." She was speaking at a consumer conference held by Lehman Brothers.