Kraft Vows $200m US Marketing Boost After Weak Q3 Sales

08 September 2003

Kraft is pumping an extra $200 million (€182.0m; £126.3m) into stateside marketing over the final months of 2003 after disappointing third-quarter sales.

The food titan plans to allocate the extra spend to supporting its biscuits, cheese, coffee and cold cuts brands. Most of the extra cash – around $140m – will be used for price control, promotions and other schemes, leaving around $60m for consumer advertising.

Kraft warned that Q3 sales were below expectations and earnings would come in at 45–47 cents per share, lower than the forecast 49 cents. In contrast, rival Procter & Gamble last week raised profit predictions for the three months to September. It now expects a leap in earnings of 19%–21% and organic sales growth of 9%–11%.

Kraft has suffered at the hands of private-label brands as its prices have risen, hence the emphasis on discounts and promotions rather than consumer advertising.

According to TNS Media Intelligence/CMR, in the last four months of 2002 the group spent $60m on advertising the same categories that will benefit from the extra spend.

Kraft’s US agency roster includes Foote Cone & Belding (New York and Chicago), J Walter Thompson (New York and Chicago), Ogilvy & Mather (NY), Young & Rubicam (NY) and Leo Burnett (Chicago).

Data sourced from: multiple sources; additional content by WARC staff