Kraft Foods

Kraft Foods, Inc.

Kraft Foods Logo Kraft Foods corporate logo.
Company type	Public (NYSE: KFT)
ISIN	US50076Q1067
Industry	Food Processing [1]
Predecessor	Former names: - see text
Founded	Chicago, Illinois (1903)
Headquarters	Northfield, Illinois, United States
Key people	Irene Rosenfeld, Chief Executive Officer
Products	See Brands section.
Revenue	profit US$42.2 billion (2008))
Operating income	loss US$3.8 billion (2008)
Net income	profit US$2.9 billion (2008)
Number of employees	98,000 (2008)
Website	kraftfoodscompany.com

Kraft Foods, Inc. (NYSE: KFT) is the fourth largest food and beverage company headquartered in the United States and the second-largest in the world (after Nestlé SA). It markets many brands in more than 155 countries.

The company is headquartered in Northfield, Illinois, a Chicago suburb. Its European headquarters are just outside Zürich, Switzerland.

A public company, it is listed on the New York Stock Exchange and became a component of the Dow Jones Industrial Average on September 22, 2008, replacing the American International Group.

History

20th century

The Kraft product logo

Canadian-born and of German origin, James L. Kraft started a wholesale door-to-door cheese business in Chicago in 1903; its first year of operations was "dismal", losing US$3,000 and a horse. However, the business took hold and Kraft was joined by his four brothers to form J.L. Kraft and Bros. Company in 1909. As early as 1911, circulars and advertisements were in use by the company.

In 1912, the company established its New York City, New York, headquarters to prepare for its international expansion. By 1914, thirty-one varieties of cheeses were being sold around the U.S. because of heavy product development, expansion by marketing, and opening a wholly owned cheese factory in Illinois.

In 1915, the company had invented pasteurized processed cheese that did not need refrigeration, thus giving a longer shelf life than conventional cheese. The process was patented in 1916 and about six million pounds of the product were sold to the U.S. Army for military rations during World War I.

In 1919, the company began national advertising and had made its first acquisition — a Canadian cheese company

In 1924, the company changed its name to Kraft Cheese Company and became a public company.. Later, in 1927, it established its London, United Kingdom, and Hamburg, Germany, sales offices — its first forays outside North America,

In 1928, it acquired Phenix Cheese Company, the maker of a cream cheese branded as Philadelphia cream cheese, and the company changed its name to Kraft-Phenix Cheese Company.

By 1930, it had captured forty percent of the cheese market in the U.S. and the company also began operating in Australia following a merger with Fred Walker & Co.

The same year (1930), National Dairy Products Corporation —- makers of the Breyers brand of ice cream and the Breakstone's brand of cottage cheese and sour cream — acquired Kraft-Phenix. During these years, Kraft's product lines were diversified from cheese to salad dressings, caramel candies, macaroni and cheese dinners and margarines. In 1933, the company began marketing by radio sponsorship. In 1935, the Sealtest brand of ice cream was launched.

During World War II, the company sent four million pounds of cheese to Britain weekly.

In 1945, Kraft changed its name to Kraft Foods Company because its product lines had diversified. Product development and advertising helped the company to grow during the postwar years, launching sliced process cheese and Cheez Whiz, a brand of process cheese sauce, in the 1950s.

During these years, Thomas McInnerney, National Dairy's owner, and James L. Kraft, Kraft's founder, died, and at the end of the decade, the divisions became less autonomous and even diversified to the glass-packaging business with the acquisition of Metro Glass in 1956.

In 1947 the company tested the marketing power of the emerging medium of television by producing an hour-long drama/anthology series, the Kraft Television Theatre. The product advertised on the program, McLaren’s Imperial Cheese, was selected because "... [it had] not only had no advertising appropriation whatsoever, but had not even been distributed for several years." As described by internal documents of J. Walter Thompson — the advertising firm which conceived of the marketing test — the result was "although there was no other advertising support for it whatsoever, still grocery stores could not keep up with the demand."

Former Philadelphia cream cheese plant in Strathmerton, Australia

In the 1960s, product development became intense, launching fruit jellies, fruit preserves, marshmallows, barbecue sauces and Kraft Singles, a brand of individually wrapped cheese slices. During this decade, the company also expanded in many markets worldwide.

In 1969, National Dairy became Kraftco Corporation and transferred to Glenview, Illinois, in 1972. In 1976, its name changed to Kraft, Inc. to emphasize the trademark the company had been known for. Reorganization also occurred after the name change. In 1980, Kraft merged with Dart Industries - makers of the Duracell brand of batteries, Tupperware brand of plastic containers, West Bend brand of home appliances, Wilsonart brand of plastics and Thatcher glass - to form Dart & Kraft.

During the 1980s, Dart & Kraft offered mixed results to its shareholders, as new acquisitions in the food business - such as Churny premium cheeses, Lender's Bagels, Frusen Gladje ice cream and Celestial Seasonings tea - slightly offset the lagging nonfood business - Tupperware's decrease in sales and KitchenAid's (acquired soon after the merger) slide in market share - leading Dart & Kraft to spin off its nonfood business (except Duracell batteries) into a new entity (Premark International, Inc.) while changing its name back to Kraft, Inc. Premark was bought by Illinois Tool Works in 1999. In 1988, Kraft sold Duracell to private equity firm Kohlberg, Kravis and Roberts, who then put into an initial public offering in 1989. Gillette bought Duracell in 1996, and itself was acquired by Procter and Gamble in 2005.

At the end of 1988, Philip Morris Companies purchased Kraft for $12.9 billion. In 1989, Kraft merged with Philip Morris's General Foods unit - makers of Oscar Mayer meats, Maxwell House coffee, Jell-O gelatin, Budget Gourmet frozen dinners, Entenmann's baked goods, Kool-Aid, Crystal Light and Tang powdered beverage mixes, Post Cereals, Shake 'n Bake flavored coatings and numerous other packaged foods - as Kraft General Foods. Its aggressive product development was reversed after the merger, as it became slow in addressing issues on its product lines due to its size, and also company politics.

In 1990, the company acquired Jacobs Suchard (a European coffee and confectionery giant) and Freia Marabou (a Scandinavian confectionery maker) to expand overseas as its business was heavily dependent on the U.S. In 1993, it acquired RJR Nabisco's cold cereal business (mainly Shredded Wheat and Shreddies cereals) while selling its Breyers ice-cream division to Unilever and its Birds Eye unit to Dean Foods. In 1994, it sold its frozen dinners unit to H.J. Heinz and in 1995, it sold its foodservice unit.

In 1995, it changed its name to the present name, Kraft Foods. The same year, it sold its bakery division (except Lender's Bagels, which was sold in 1996 to CPC International), its candy division and its tablespreads division. Log Cabin syrup was sold in 1997.

21st century

In 2000, Philip Morris (renamed Altria in 2003) acquired Nabisco Holdings for $18.9 billion and merged the company with Kraft Foods the same year. In 2001, Philip Morris sold 280 million Kraft shares via the third-largest IPO of all time, retaining an 88.1% stake in the company.

In 2004, it sold its sugar confectionery division to Wrigley, while doing minor divestitures - including its hot cereals division in 2007, its pet snacks division in 2006, juice drinks and functional water in 2007 and some grocery brands in 2006.

Altria announced on January 31, 2007, that it would spin off all the remaining Kraft Foods shares to Altria's shareholders; each will be given approximately 0.7 share of Kraft for every Altria share they own.

Investor Nelson Peltz bought a three-percent stake at Kraft Foods and is talking with the executives on revitalizing the business, with options such as buying Wendy's fast food chain or selling off Post cereals and Maxwell House coffee. On January 31, 2007, after months of speculation, the company announced that its 88.1% stake would be spun off to Altria shareholders at the end of March 2007. Kraft is now an independent publicly held company.

In July 2007, the company bought Groupe Danone's biscuit (cookie) and cereal division for $7.2 billion. While two years earlier firestorms of protest had arisen over plans for American PepsiCo's hostile takeover of the French company, Kraft's announcement was not met with the same protests, although a possible deal comes with strings: promising not to close French factories and keep the cookie headquarters near Paris for at least three years. Kraft is much more powerful in the US than in foreign markets.

In November 2007, Kraft agreed to sell its cereal unit to Ralcorp Holdings, a major private-label food maker, for $2.6 billion in a form of a spin-off merger. This would add 50% to Ralcorp's sales, to $3.3 billion, and will be used for Kraft's debt payment, which is at $13.4 billion, in danger of a downgrade by Standard and Poor's.

In February 2008, Berkshire Hathaway Inc. run by billionaire investor Warren E. Buffett announced that it had acquired an 8% stake in Kraft worth over $4 billion. Buffett's business partner Charles Munger had also invested over $300 million in Kraft.

On September 22, 2008, the company replaced the troubled insurance company, American International Group in the Dow Jones Industrial Average.

On September 7, 2009, Kraft made a £10.2 billion takeover offer for the long-established British confectionery group Cadbury, makers of Dairy Milk and Bournville chocolate.

On November 9, 2009 Kraft's £9.8bn take over bid was rejected by Cadbury's. Cadbury's stated that the take over bid was a "derisory" offer. Kraft renewed the offer under the same terms on 4 December 2009.

Sponsorships

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.

Brands

The company's core businesses are in beverage, cheese and dairy, snack foods and confectionery, and convenience foods.

Ritz "Crackers'n Cheez" Handi-Snacks.

A container of Planters Dry Roasted Peanuts.

File:Pictures1 001.jpg

Velveeta is a processed cheese product manufactured by Kraft Foods.

A-G Template:Multicol

• A1 Steak Sauce
• Africana Romania
• Ali Coffee
• Alpen Gold (chocolate) (Poland, Russia)
• Arrowroot biscuits
• Back to Nature
• Baker's (chocolate)
• Balance Bar
• Better Cheddars
• Boca Burger
• Bonox
• Breakstone's
• BullsEye Barbecue Sauce
• Café HAG
• California Pizza Kitchen (grocery store items)
• Calumet Baking Powder
• Cameo (biscuits)

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• Capri Sun (juice drink)
• Carte Noire
• Cheesybite
• Charada (Peru)
• Cheese Nips
• Cheez Whiz
• Cheezels (Malaysia)
• Chicken in a Biskit
• Chips Ahoy! (cookies)
• Chipsmore (Malaysia, Singapore)
• Christie (Canadian division of Nabisco)
• Claussen (pickles)
• Clight
• Club Social (crackers)
• Cool Whip (non-dairy whipped cream)
• CornNuts (snack food)
• Coronita (Peru)
• Côte d'Or (Belgium)
• Country Time (powdered drink mix)

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• Cracker Barrel
• Crystal Light
• Daim (Sweden)
• Dairylea (Europe)
• Delissio (Canada)
• DiGiorno (pizza)
• Easy Cheese
• Eden processed cheese (Philippines)
• Estrella (Sweden)
• Field (Peru)
• Fig Newtons
• Filipinos (Spain, Portugal)
• Freia (Norway)
• General Foods International
• Gevalia (Sweden)
• Grape-Nuts (breakfast cereal)
• Grey Poupon (mustard)

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H-M Template:Multicol

• Handi-Snacks
• Honey Maid
• In-A-Biskit (Australia)
• Jack's Pizza
• Jacobs (Europe)
• Jacob's (biscuits) (Malaysia)
• Japp (Scandinavia)
• Jell-O (gelatin dessert)
• Jet-Puffed Marshmallows
• Kenco (United Kingdom)
• Knox (gelatin)
• Knudsen (dairy products)
• Kong Haakon (Norway)
• Kool-Aid (flavored drink mix)

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• Korona Chocolate (Ukraine)
• Kraft BBQ Sauce
• Kraft Caramels
• Kraft Macaroni and Cheese
• Kraft Dinner (Canada)
• Kraft Easymac
• Kraft Mayo
• Kraft Bagelfuls
• Kraft Peanut Butter
• Kraft Singles (pasteurized prepared cheese product)
• Kraft Sandwich Spread
• Lacta (Brazil)
• Lefèvre-Utile Biscuit Co.

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• Lunchables
• Lyuks (potato chips) (Ukraine)
• Maarud (potato chips) (Norway)
• Marabou (Sweden)
• Maxwell House (coffee)
• Milka (Switzerland, Germany, rest of Europe )
• Miracle Whip (salad dressing spread)
• Miracoli (Germany)
• Mostro (Peru)
• Mikado (United Kingdom) see Pocky (Japan)

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N-Z Template:Multicol

• Nabisco
• Nabob (coffee) (Canada)
• Naked Drinks
• Nilla
• Non-Stop (Scandinavia)
• Nutter Butter
• O'boy (Scandinavia, Estonia)
• Onko (coffee)
• Oreo (cookie)
• Oscar Mayer
• Grated Parmesan cheese
• Philadelphia cream cheese
• Pigrolac
• Planters
• Poiana (Romania)
• Polly-O (cheese)
• Premium (a Nabisco brand of saltine crackers)
• Pretzels
• P'tit Québec

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• Prince Polo
• Pure Kraft Salad Dressings
• Ritz
• Royal baking powder
• Seven Seas (salad dressings)
• Sanka (decaffinated coffee)
• Shake 'n Bake
• Simmenthal (canned meat)
• Snackabouts
• SnackWells
• South Beach Living
• Starbucks (grocery store items)
• Stove Top stuffing
• Suchard
• Svoge (Bulgaria)
• Taco Bell (grocery store items)
• Tang
• Tassimo (single-serve coffee machines using pods branded as T-Discs)
• Teddy Grahams

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• Terrabusi (Kraft Foods Argentina)
• Terry's (chocolates)
• Terry's Chocolate Orange
• Tiger Energy Biscuits (Southeast Asian countries)
• Toblerone (Kraft Foods Switzerland)
• Tombstone (frozen pizza)
• Triscuit (snack cracker)
• Thinsations
• Trakinas
• Twist
• Twisties (Malaysia)
• Vegemite
• Velveeta (processed cheese product)
• Vizzolini (dry pastas)
• Wheat Thins (snack cracker)

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Former brands

• Bird's Custard, sold to Premier Foods in late 2004
• Birds Eye (frozen products), sold to Dean Foods in 1993; later independent
• Breyers and Light N' Lively yogurt, sold to CoolBrands International
• Breyers, Sealtest, Frusen Gladje and Light N' Lively ice cream, sold to Unilever in 1993, though the Oreo ice cream in the U.S. is made by Breyers.
• Budget Gourmet frozen meals, sold to H.J. Heinz in 1994; now sold by Bellisio Foods under the Michelina's brand
• Celestial Seasonings (Bought back by original owners in 1988)
• Cheddarie cheese spread, discontinued
• Cheese Pot cheese spread, discontinued
• Cream of Wheat and Cream of Rice sold to B&G Foods in 2007
• Del Monte, Aylmer, Coronation and other grocery products in Canada (sold to CanGro in 2005)
• Farley's & Sathers now independent.
• Fruit2O and Veryfine beverages sold to Sunny Delight in 2007
• Golden Crown margarine, discontinued
• Koogle flavored peanut butter, discontinued
• Kraft Eating Right frozen entrees, discontinued
• Kraft Foodservice sold to Clayton, Dubilier and Rice Inc. in 1995
• Kraft Ramek (Italy, Middle-East) soft processed cream cheese foil wrapped in serving-size wedges, that are packaged in a round, flat box (250g)
• Lender's bagels became part of Blackstone Group's Pinnacle Food Group in 1996.
• Life Savers (Canada) (sold to Hershey's in 1987 then sold to Beta Brands in 1996 then sold to Wm. Wrigley Jr. Company in 2005)
• Life Savers (U.S.) and Altoids (sold to Wm. Wrigley Jr. Company in 2005)
• Milk-Bone (sold to Del Monte Foods in 2006)
• Minute Rice in 2006 to Riviana Foods
• Parkay, Touch of Butter, and Chiffon sold to Nabisco Brands, Inc. in 1995; Nabisco's butter business was sold to ConAgra Foods in 1999.
• Post Cereals (from Shredded Wheat to Honey Bunches of Oats) sold to Ralcorp Holdings August 2008
• Postum hot cereal-based beverage, discontinued in 2007
• Rondele spreadable cheeses sold to Waterbury Holdings in 1996
• Royal Lunch Milk Crackers discontinued 2008
• Spreadery spreadable cheeses, discontinued
• Stella D'oro sold to Stella D'oro Biscuit Co., Inc., a newly formed subsidiary of Brynwood Partners in 2006; now owned by Lance Inc.
• Trolli (sold to Wm. Wrigley Jr. Company and then to Farley's & Sathers)
• Uneeda Biscuits
• various baked goods labels (consisting of Entenmann's, Freihofers, Oroweat and Boboli brands) to Bestfoods in 1995, later owned by George Weston Limited
• Caramel and marshmallow business, sold to Texas Pacific Group in 1995; later acquired by Nabisco and reacquired in turn by Kraft in 2000
• Specialty oils business sold to Associated British Foods in 1995
• Stove Top Oven Classics, discontinued in 2003

Kraft Foods in the news

File:Kraft van.jpg

1950s Kraft delivery van in Australia, advertising "Velveeta", "Vegemite" and "Kraft Cheddar"

In 1992, the gelatin industry, in particular Kraft's Atlantic Gelatin plant in Woburn, Massachusetts, which supplies the vast majority of Jell-O, came under scrutiny for a history of noxious smells, toxic waste releases into Boston Harbor, and a policy of corporate secrecy. Heading off a rash of local complaints, industry lobbyists invited Massachusetts state representatives Paul Casey and Carol Donovan into the plant. However, the representatives were barred from going past the conference room. Repeated requests for a plant tour by journalists were refused. In 1993, the plant was hit with a $250,000 fine for violating the Clean Air Act of 1970. In a February 4 1996 article, the Associated Press reported that a Massachusetts Department of Environmental Protection official was one of only a few outsiders who had seen the inside of the Woburn plant.

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 5500 jobs, as well as the sale of 10% of its branded products. Kraft Foods expects to eliminate 8000 jobs, roughly 8% of its workforce.

In 2005 the MX newspaper in Melbourne, Australia reported that Kraft refused to disclose the trans fat content of its products in its labelling. Company spokespeople contested the evidence that trans fats posed a known health risk and stated that a causal link was unproven.

On September 7 2009, Kraft made an offer to buy 100% of the share capital of Cadbury's for over £10bn. The Panel on Takeovers and Mergers, the UK body that administers the City Code on Takeovers and Mergers, has given Kraft 40 days to secure the deal or walk away for at least six months . As a result the communications war between the two organisations has escalated. Kraft CEO Irene Rosenfeld launched the bid with an online video to sell its story to the investment community

See also

• General Foods Corporation
• Wise Use Movement
• Ovson Egg

External links

• http://www.kraftfoodscompany.com kraftfoodscompany}}, official website
• Kraft Food/Recipe Website North American
• kraftfoods.co.uk, company's United Kingdom official website
• Kraft Foods Inc. Fact Sheet from Hoover's
• Kraft Foods Radio Show
• List of North American Kraft Companies
• Thinsations Website