Kraft Foods Maps Growth Strategy

Irene Rosenfeld, CEO of Kraft Foods Inc., announced in late February a comprehensive strategy to accelerate the company's growth. "This is a pivotal time in Kraft's history, and while there are things we have to fix, our organization is energized about pursuing a number of trajectorychanging initiatives," says Rosenfeld. "I am confident that our new strategies will return Kraft to predictable and consistent growth." The company's four strategies are:

• Rewire the organization for growth
• Reframe Kraft's categories to make them more relevant to consumers
• Exploit Kraft's sales capabilities
• Drive down costs without compromising quality

 

The company expects a return to consistent growth in three stages. In 2007, Kraft expects to grow its top line 3 percent to 4 percent organically and invest its growth, as well as restructuring savings, back into the first wave of trajectory-changing growth initiatives. This represents an incremental $300 to $400 million investment in quality, marketing, R&D and capability building. In 2008, the company expects its operational turnaround to gain momentum. Kraft will again grow revenue 3 percent to 4 percent organically, with operating income exceeding revenue growth. The company will invest a portion of its growth back into the business, including further marketing spending, toward a long-term target of 8 percent to 9 percent of net revenue. "By 2009, we'll hit our stride," Rosenfeld says. "We'll fully realize the financial benefits of our investments and deliver our long-term targets of at least 4 percent organic net revenue growth and 7 percent EPS growth." //