Kraft Foods has announced that it will split its north American grocery division from its global snacks business. The decision to split the business into two will create a global snacks maker to sell brands such as Cadbury chocolate, Oreo biscuits and Trident chewing gum.
The company’s grocery division has leading brands such as Kraft’s Macaroni and Cheese, Oscar Mayer meats and Philadelphia cream cheese; it has revenues of about $16 billion. The rapidly growing snacks business has revenues of about $32 billion; its brands includes Oreo biscuits, Cadbury, Trident gum and others. “As we acquired Cadbury and began to put the businesses together, we continued to look at our strategic plans for the combined company and it was clear that we had very different businesses,” said chief executive Irene Rosenfeld. Credit Suisse analysts have estimated that the snacks group could expand at seven per cent a year; they have predicted a two per cent growth rate for the north American business. “The biggest complaint we hear about this company is that it is too big and too slow,” they commented. “This solves it.”
The news comes less than 18 months after Kraft’s $19 billion takeover of the UK chocolate maker Cadbury. Its shares rose more than 4 per cent to $35.70 in morning trading in New York yesterday. (5 Aug)
© 2011 - ESM: European Supermarket Magazine
