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On solid 3Q, Kraft promises more innovation for key brands

NORTHFIELD, Ill. — Kraft Foods Group reported that new product sales, increased advertising investment and improved productivity have contributed to profit gains for the quarter ended Sept. 30.

During the company's third-quarter investors call, Kraft CEO Tony Vernon emphasized strong performances from Kraft's cheese business, with nine consecutive quarters of growth; its cold cut business; and brands that have benefited from innovation and stepped-up marketing, like Lunchables, Velveeta and Kool-Aid. Several other brands — including Maxwell House, Planters and Jell-O — aren't performing so well, and are about to undergo significant overhauls, the company announced.

"Jell-O must be revitalized, and we must do it in the face of yogurt's explosive growth. And Planters needs significantly more work to re-establish category leadership and profitable growth," Vernon said.

Much of Kraft's future success will depend on the company's ability to re-energize antiquated brand names like Stove Top, Cool Whip and Shake 'N Bake — or sell them off.

Sales for the quarter were up 3% to $4.6 billion, exceeding analysts' expectations of $4.55 billion. This is the company's first quarter reporting earnings as a standalone company; Kraft Foods Group is now the fourth-largest food and beverage company in North America, behind PepsiCo, Nestle and Coca-Cola.

 

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