Food Business News - November 8, 2011 - 18

Kraft Foods proﬁts climb in third quarter
New product launches in North America help generate momentum
Continued from Page 1 from volume/mix. The adverse effects of the Starbucks consumer packaged goods business and the timing of SG&A expenses partially offset the gains. Net sales rose 12% to $13,226 million from $11,863 million. Organic net revenues climbed 8% to $12,691 million from $11,708 million, driven by a 7 percentage point gain from pricing and 1.4 points due to volume/mix. “Our investments in marketing and new products continue to drive high quality growth and solid market shares,” said Irene Rosenfeld, chairman and chief executive officer. “And we’ve accomplished this despite having taken significant price increases to offset record-high input costs. Together with substantial savings opportunities, we expect to deliver top-tier results in 2011 and remain on track to launch two industry-leading companies with strong operating momentum in the coming year.” In a conference call with securities analysts on Nov. 2, Ms. Rosenfeld said that through the first nine months of the fiscal year Kraft Foods’ “big bet” grocery innovations have added more than $350 million in net revenues. “This stepped-up innovation, together with increased brand support has enabled us to offset significantly higher input costs through pricing,” she said. Operating income within Kraft Foods North America totaled $1,035 million, up 3% from $1,002 million in the same

period a year ago. Net sales rose to $6,133 million from $5,873 million. U.S. Grocery operating income rose 20% to $292 million, while sales climbed 7% to $836 million. Operating income of U.S. Snacks increased to $221 million, up 2% from $216 million in the same period of fiscal 2010. Sales, meanwhile, rose 5% to $1,579 million from $1,505 million. In the company’s U.S. Convenient Meals division, operating income was

North American grocery business to keep Kraft Foods name
NORTHFIELD, ILL. — Once Kraft Foods Inc. splits into two business entities, one consisting of its North American grocery businesses and the other featuring its international snack entities, the North American business will retain the Kraft Foods name, said Irene Rosenfeld, chairman and chief executive officer. During a conference call on Nov. 2 to discuss Kraft Foods Inc.’s thirdquarter results, Ms. Rosenfeld updated securities analysts on the progress that has been made in preparing the company to be divided some time in 2012. “We’ve also decided on the name for the North American grocery company when it launches next year,” she said. “It will be Kraft Foods. This company will keep the Kraft name because it has very strong consumer recognition and brand equity in the U.S. and Canada. We’re still working on the name for the global snacks company, which will be put to a shareholder vote in May.” Ms. Rosenfeld added that since the company’s last update in September it had defined the strategic foundation for each new business entity and outlined the brand splits and licensing structures that will have to be created between the two companies. “The most significant (brand split) was about the Planters brand,” Ms. Rosenfeld said. “Specifically, we decided that Planters would fit best within the North American grocery company. Why? Because Planters is a U.S.-only business. Most of its sales are in supermarkets, and its route to market and supply chain aligns much better with a warehouse network, rather than with the directstore delivery system used for cookies and crackers. Until the separation is completed, though, the business will continue to be managed and reported as part of U.S. snacks.” Ms. Rosenfeld added that management teams for each new company will be announced by the end of the year. FBN

Irene Rosenfeld

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November 8, 2011

Food Business News - November 8, 2011

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