Kraft Sees Revenues Fall, But Will Keep Spending on Ads

06 February 2009

NORTHFIELD, Illinois: Kraft Foods, America's biggest food manufacturer, saw its net income fall to $163 million (€127m; £112m) in the final quarter of 2008, down from $585m in Q4 2007, but will continue to invest in marketing communications.

The company's net revenues actually increased by 6.2% to $10.8bn in the final four months of last year, but taxes, restructuring and commodity prices were said to have impacted its earnings overall.

Irene Rosenfeld, Kraft's ceo, emphasised that advertising – on which the company spent around $3bn in 2008 – will be a key tenet of the food giant's operations this year, with a particular focus on value.

Says she: "We have significant cost savings at our back to reinvest in brand building. Our 2009 advertising and merchandising plans will continue to emphasize the value proposition of our brands."

Rosenfeld also argued that advertising has helped Kraft to withstand price pressures, and means it now leads the market across 80% of its product portfolio, despite the pressure of own brand.

She concluded: "Combined with the spike in unemployment and rapid deterioration of consumer sentiment, it's not surprising that branded consumption was down and private label picked up share."

Data sourced from; additional content by WARC staff