CHICAGO: Kraft Foods plans to spend between $300 million (€228m; £153m) and $400m on product development and marketing this year to boost sluggish growth. A radical restructure of the company was announced by ceo Irene Rosenfeld, who admitted that existing turnaround strategy is not "broad-based enough".
Details of the reorganization were unveiled as Kraft's parent, the giant Altria Group, plans to spin off its 89% stake in the largest North American packaged food manufacturer [WARC News: 02-Sep-07].
Kraft says it strategy will be four-pronged: "rewire the organization for growth"; make its categories more relevant to consumers; exploit its sales capabilities and drive down costs.
Rosenfeld aims to increase marketing as a share of sales from its current 6.9% to between 8% and 9% by 2009. She says the company needs to spend more on marketing and develop new products that go beyond extensions of existing lines.
She adds: "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 trajectory-changing initiatives. I am confident that our new strategies will return Kraft to predictable and consistent growth."
The company, whose stable of brands includes Maxwell House coffee and Oreo cookies, has already sold off products with annual sales of $1bn [WARC News: 25-Jan-07], and is cutting six thousand jobs - equivalent to 6% of its workforce.
Data sourced from Financial Times online; additional content by WARC staff