Kraft Foods
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This article is outdated. (October 2012) |
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| Type | Public |
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| Traded as | NASDAQ: KRFT S&P 500 Component NASDAQ-100 Component[1] |
| Industry | Food processing |
| Founded | (1903-2012) (New kraft 2012-present) |
| Headquarters | Northfield, Illinois, U.S. |
| Area served | United States and Canada |
| Key people | John Cahill (Executive Chairman) Tony Vernon (CEO) |
| Products | List of products |
| Revenue |  US$ 18.339 billion (2012)[2] |
| Operating income | US$ 2.670 billion (2012)[2] |
| Net income | US$ 1.642 billion (2012)[2] |
| Total assets |  US$ 23.329 billion (2012)[2] |
| Total equity | US$ 3.572 billion (2012)[2] |
| Employees | 23,000 (2012)[3] |
| Website | www.kraftfoodsgroup.com |
Kraft Foods Group Inc. is an American grocery manufacturing and processing conglomerate,[4] which is headquartered in Northfield, Illinois, a Chicago suburb.[5] It was founded in 1903.
Kraft Foods Group is an independent public company; it is listed on the Nasdaq. (NASDAQ: KRFT)
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Split from Mondelēz International[edit]
On 1 October 2012, Kraft Foods Inc. spun off its snacks and confections business to a new company called Mondelēz International, Inc. and spun off its North American grocery business into a new company called Kraft Foods Group, Inc. The new Kraft Foods Group, Inc. will become an American company worth $18 billion USD and Mondelēz International will become an international snack and confection company worth $34 billion USD.
Kraft Foods Group focuses on the North American grocery business. Mondelēz International focuses on the global snacks business, including the former Cadbury businesses, plus global brands including Dairylea and Oreo.[6] On April 2, 2012, Kraft Foods Inc. announced that it had filed a Form 10 Registration Statement to the SEC to split the company into two companies to serve the "North American grocery business".[7]
Sponsorships and promotions[edit]
Kraft is an official partner and sponsor of Major League Soccer and sponsors the Kraft Nabisco Championship, one of the four "majors" on the LPGA tour. The company also sponsors the Kraft Fight Hunger Bowl, a post-season college football bowl game.
Kraft HockeyVille is a Canadian reality television series developed by CBC/SRC Sports and sponsored by Kraft Foods in which communities across Canada compete to demonstrate their commitment to the sport of ice hockey. The contest revolves around a central theme of community spirit in Canada and is directed by Mike Dodson.
Kraft has released an iPad app called "Big Fork Little Fork" which, in addition to games and other distractions, has information regarding how to use Kraft foods in nutritious ways.[8][9] This app costs $1.99; a version for home computers is available on the iTunes app store.
Brands[edit]
The company's core businesses are in beverage, cheese, dairy foods, snack foods, and convenience foods. A selection of Kraft's main brands are as follows:[10]
- Capri Sun US License
- Jell-O
- Kraft, including Kraft Dinner, Kraft Singles, Kraft Mayo
- Maxwell House
- Oscar Mayer
- Philadelphia
- Velveeta
- Vegemite
Trans Fat Litigation[edit]
In 2010, two California residents filed a class action lawsuit against Kraft Foods for claiming certain products are healthy when in fact they contain unhealthy trans fat. Kraft denied any wrongdoing, saying all packaging claims are true and legal. As of June 2012, the case is still ongoing.[11]
A United States District Judge certified the class on June 6, 2012.[11]
Complaint[edit]
Teddy Grahams, varieties of Ritz Crackers, Honey Maid Grahams, Premium Saltines, Ginger Snaps, and Vegetable Thins all contain artificial trans fat, and Kraft presents these products as healthy with phrases like "wholesome choice," "sensible snacking," and "made with real vegetables." The complaint in the case argues that these claims are a violation of California's Unfair Competition Law, Consumer Legal Remedies Act, and False Advertising Law.[11][12]
The lawsuit cites current scientific consensus on the dangerous health effects of trans fat, which causes coronary heart disease[13] and has been linked to type 2 diabetes[14] and some forms of cancer.[12][15] The American Heart Association concludes that there is "no safe level" of trans fat in the diet.[16]
Based on the trans fat content and other unhealthy ingredients in Kraft products, the lawsuit makes several arguments:[12]
- Health claims like "a wholesome choice," which appears on Teddy Grahams, and "Sensible Snacking," which appears on several products, are false.
- "No cholesterol" claims are misleading because they imply that the snack is good for cholesterol levels, when in fact trans fat is worse for cholesterol health than actual dietary cholesterol.
- Claims like "made with real vegetables" or "real ginger & molasses" are misleading because the products contain less of these "real" and healthy ingredients than they contain artificial trans fat.
- Teddy Grahams packaging claims to be a "good source of calcium, iron & zinc to support kids' growth and development," but this health claim is deceptive because the trans fat content is more harmful than the minerals are helpful.
- Various additional phrases like "whole wheat" and "graham" imply a health benefit that the products do not contain.
- On each package, some individual claims may be true, but overall, they add to the deceptive message of healthfulness.
Kraft's response[edit]
Kraft denies any wrongdoing. Its response briefs emphasize that the challenged claims are technically true. For example, Vegetable Thins are "made with real vegetables," and Kraft argues that this true statement cannot be called misleading. Kraft uses a similar line of argument for claims like "good source of calcium, iron & zinc to support kids' growth and development," "whole wheat," and others.
Regarding several packaging claims, Kraft argues that they are not factual statements that can be proven true or false. For example, Kraft argues that the word "wholesome" is subjective and vague. Promotional statements that are too vague to prove or disprove are called puffery and are not actionable under the law. Kraft argues that "wholesome," "sensible," and "smart" are all puffery and therefore cannot be found misleading or deceitful.[17]
Other cases[edit]
The current lawsuit is not the first time Kraft has been criticized for the trans fat in their products. In 2003, a California lawyer made national headlines by suing Kraft for using trans fat in Oreo cookies.[18] Kraft foods announced a trans-fat free reformulation of Oreos shortly after the 2003 lawsuit was filed, and the lawsuit was dropped. Kraft denied that the change was made in response to the lawsuit, noting that the reformulation had been in planning long before the lawsuit.[19]
Kraft Foods in the news[edit]
Kraft began a major restructuring process in January 2004, following a year of declining sales (blamed largely on the rising health consciousness of Americans) and the sacking of co-CEO Betsy Holden. The company announced closures of 19 production facilities worldwide and the reduction of 5,500 jobs, as well as the sale of 10% of its branded products.
On January 19, 2010, Kraft sealed the deal to buy 100% of the share capital of Cadbury for over $19 billion dollars.[20][21]
On March 17, 2010, Kraft Foods said it was "truly sorry" over its closure of a Cadbury factory in Somerdale. Senior Kraft executive Marc Firestone made the public apology to MPs at a parliamentary select committee hearing.[22]
In March 2011, in the US, Kraft Foods introduced MiO, a liquid flavoring product with zero calories and sugar-free geared to 18 to 39-year-old consumers.[23] MiO has no artificial flavors but it does have artificial colors, artificial sweeteners and artificial preservatives, unlike some competing flavoring products, according to USA Today.[24]
In August 2011, Kraft Foods announced plans to split into two publicly traded companies—a snack food company and a grocery company.[25]
On September 10, 2010 a disgruntled employee angered over a recent suspension, Yvonne Hiller, opened fire inside the Philadelphia Factory where she had worked for 15 years. Armed with a .357, Yvonne shot 3 co-workers, killing 2 of them. Philadelphia Police responded within minutes of the 911 call. SWAT took Yvonne into custody at 8:30pm.[26]
Throughout 2012, Kraft contributed $1,950,500 to a $46 million dollar political campaign known as "The Coalition Against The Costly Food Labeling Proposition, sponsored by Farmers and Food Producers" [27] This organization was set up to oppose a citizen's initiative, known as Proposition 37, demanding mandatory labeling of foods containing genetically modified ingredients. As a result, there were calls for a boycott of Kraft products.[28]
Recalls[edit]
Kraft entered mainstream headlines in September 2011, when it had to recall over 130,000 cases of Velveeta Shells & Cheese microwaveable cups. The company said there was a possibility that the cups could contain wire bristles.[29]
In April 2009, Kraft Foods issued a voluntary recall of products containing pistachios after discovering salmonella in one of its Illinois manufacturers. Kraft pinpointed as the source a California pistachio grower, which issued an initial recall of over 2 million pounds of nuts before broadening the recall to much of their 2008 crop.[30][31] A Washington Post editorial credited the "aggressive food safety system at Kraft Foods" for efficiently addressing the danger.[32]
See also[edit]
References[edit]
- ^ "Kraft Foods Group to Join Nasdaq 100". Fox Business. 2013-03-08. Retrieved 2013-04-02.
- ^ a b c d e "2012 Annual Report". Kraft Foods.
- ^ "About Us". Kraft Foods. Retrieved 9 May 2013.
- ^ "Kraft Foods Inc.". Funding Universe. 2002. Archived from the original on August 19, 2010. Retrieved 2008-03-10.
- ^ "2009 Fact Sheet." Kraft Foods. 6/7. Retrieved on January 30, 2011. "Corporate Offices Kraft Foods Inc. Three Lakes Drive Northfield, IL 60093"
- ^ Rushe, Dominic (21 March 2012). "Kraft spins off snacks business into new Mondelez International company". London: The Guardian. Retrieved 21 March 2012.
- ^ "Financial News Release: Kraft Foods Announces Filing Of Form 10 Registration Statement For Planned Spin-Off Of North American Grocery Company". PR Newswire. 2012-04-02. Retrieved 2012-04-09.
- ^ "Big Fork Little Fork". KraftRecipes.Com. Retrieved January 4, 2011.
- ^ Kleinberg, Adam (January 4, 2011). "Why Every Brand Needs an Open API for Developers". Mashable.Com. Retrieved January 4, 2011.
- ^ "Largest Brands". Kraft Foods Group. 2012. Retrieved 28 October 2012.
- ^ a b c "Taking Kraft to Court"
- ^ a b c "Second Amended Complaint for Violations of the UCL, FAL, and CLRA", September 16, 2010
- ^ Dariush Mozaffarian et al, "Trans Fatty Acids and Cardiovascular Disease", New England Journal of Medicine, 2006.
- ^ Frank B. Hu et al, "Diet, Lifestyle, and the Risk of Type 2 Diabetes Mellitus in Women", New England Journal of Medicine, September 2001.
- ^ Veronique Chajes et al, "Association between serum trans-monounsaturated fatty acids and breast cancer risk in the E3N-EPIC Study", Am J Epidemiology, 2008 June.
- ^ "American Heart Association: A History of Trans Fat"
- ^ "Motion to Dismiss Second Amended Complaint", December 7, 2010.
- ^ Marian Burros, "A Suit Seeks to Bar Oreos as a Health Risk", New York Times, May 14, 2003.
- ^ "Lawsuit dropped as Oreo looks to drop the fat", CNN, May 14, 2003.
- ^ Richard Wachman (2009-09-30). "30/9/2009". London: Guardian. Retrieved 2011-08-04.
- ^ Communicatemagazine.co.uk, Communicate magazine - September 2009
- ^ "Kraft apologises for closing Cadbury plant". NewStatesman. March 17, 2010. Retrieved March 18, 2010.
- ^ Packaging Digest, Kraft's new mio liguid flavoring, March 30, 2011, http://www.packagingdigest.com/article/517582-Kraft_s_new_MiO_liquid_flavoring_stays_handy_in_a_portable_pod.php
- ^ USA Today, Feb 22 2011, Kraft Hopes to Make Splash with New Mio Water Flavoring, http://www.usatoday.com/money/industries/food/2011-02-22-watertweaks22_ST_N.htm
- ^ "Kraft Foods - Investor Center - Financial News Release". Phx.corporate-ir.net. Retrieved 2011-08-04.
- ^ "Yvonne Hiller Suspect in Kraft Shooting: Two Killed, One Wounded at Philadelphia Plant". CBS News.
- ^ http://www.kcet.org/news/ballotbrief/elections2012/propositions/prop-37-funding-genetically-engineered-food.html
- ^ http://anh-europe.org/news/anh-calls-for-international-boycott-of-prop-37-no-campaign-companies
- ^ Haller, Stephanie. "Kraft Recalls 137,000 Velveeta Shells & Cheese for Metal Wires". ConsumerBell. Retrieved 23 January 2012.
- ^ Garance Burke (AP), "Kraft Foods offers salmonella timeline", USAToday, April 6, 2009
- ^ Lyndsey Layton, "Pistachio Firm Expands Recall Over Salmonella", Washington Post, April 7, 2009
- ^ "A Tale of Two Scares", Editorial, Washington Post, May 4, 2009
External links[edit]
- Official website
- Meals With Kraft Kraft's meal inspiration website
- Kraft Foods Radio Show from cjly.net
- Kraft Foods collected news and commentary at The Guardian
- Kraft Foods Inc. collected news and commentary at The New York Times
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