On solid 3Q, Kraft promises more innovation for key brands
NORTHFIELD, Ill. – Kraft Foods Group on Wednesday announced 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.