Will the Kraft Heinz Company Ever Regain the former Glory of Kraft Foods?

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Kraft Foods Inc., once based in Illinois, was one of the World’s second largest processed food companies, with 2014 sales totaling up to $54 billion. Its popular brands lead the way forward. The global lineup included such distinguished products as:

  • Maxell House
  • Oreo
  • Cadbury
  • Chips
  • Ahoy
  • Honey
  • Maid
  • Dentyne
  • Velveeta
  • Cheez
  • Whiz
  • Oscar Meyer,
  • Kraft
brands

With this line-up of impressive brands, Kraft Foods had its share in outshining the competition and taking a substantial size of the market share.  Kraft Food’s business units thrived in such regions as North America, Europe as well as in other developing countries.

However, because of the slowdowns in market growth and adverse economic conditions from 2007-2010, Kraft Food’s processed food suffered from low sales.  The low sales were primarily in North American and various parts of Europe.

 A New Perspective

Unwilling to admit that buyer interest in its’ processed food’ was due to the adverse economic forces operating in the market- place, higher management and board blamed their troubles on an insufficient strategy which ignored the importance of growth.

To increase its performance and create value for shareholders, Kraft Foods engaged in a serious of spinoffs and acquisitions that enabled it to survive through the ups and downs of an ever-changing demographic.

The Big Shake-Up: Repositioning for Growth

In August 2011, Kraft Food Inc. split into two organizations: a snack food company named Mondelez International, Inc. and a North American Grocery company.  On October 1 2012, Kraft Foods Inc. changed its North American grocery business to Kraft Foods Group, Inc.  On March 25, 2015, Kraft Foods Group merged with a major partner: H.J. Heinz Co.  The company is owned by 3G Capital and Berkshire Hathaway Inc.

The impact of this merger was nothing short of astonishing. The two became the world’s fifth-largest food and Beverage Company.  Shares of Kraft rose about 17 percent after the deal was announced. Also, Heinz rose back into the public spotlight after a 2013 takeover.

Keeping a Strong Balance

Kraft Food survived the slowdown in market growth by heightening its prices for its most popular products. This decisive action allowed its revenue to grow as well as its operating profit.  The ability to sell popular brands despite price increases is what separates a successful organization from an unsuccessful one. Consumers love, and demand for the brand compels them to pay whatever cost that may be applied.

4 Key Success Factors

Over the year, the Key Success Factors which helped sustained Kraft Foods through market turmoil include:

  • Spinoffs
  • Acquisitions
  • Price increases
  • Mergence

Without these effective strategies, Kraft Foods may have gone the way of many industrial giants. The ability to see new approaches and methods are extraordinary competencies for any organization who desires to meet the challenge with the confidence and creativity to overcome them.

The Lessons Learned: Strong Brand Image

Kraft Heinz Company, based in Minnesota, teachers that a strong brand image and the ability to initiate effective spinoffs and form joint ventures that provide access to other markets will enable a company to thrive through a stumbling economic period.

Such organization will be able to maintain, regardless of the increasing intensity of competition among industry rivals, including potent new entrants and substitute products.

Maintaining Sustained Success

With the merging of  Kraft Heinz Company, Kraft  major  brands still rules, which includes A.L, Grey Poupon, Gevalia, Planters, Capri Sun, Jell-O, Kraft dinners, Oscar Meyer, Velveeta, RIDG’s Finer Foods, Kool –Aid, Boca Burger as well as Maxell House.

To maintain its success as one the most outstanding food business, Kraft Heinz Company must continually make the adjustments needed to meet external conditions. An innovative mindset, continuous improvement, a willingness to form alliances, and the courage to engage in creative approaches and methods are the keys to the continual greatness of Kraft Heinz Company.

 

 

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