CAGNY: Kraft CEO: Food firms must adapt price, SKUs

By Hannah Abdulla | 19 February 2014

Kraft CEO Tony Vernon highlights the changing consumer behaviour in America

Kraft CEO Tony Vernon highlights the changing consumer behaviour in America

Food manufacturers will have to adapt their prices and product offering if they want to remain relevant to a consumer now shopping in different ways, Kraft Foods Group CEO Tony Vernon has said.

Speaking to at the Consumer Analyst Group of New York conference yesterday (18 February), Vernon said consumer buying patterns had dramatically changed in recent years, in part due to the downturn. 

Planned shopping trips were dominating the mix and impulse buys had dropped.

"This is largely due to the income pressures on American families," explained Vernon. "It would also explain why consumers have become less responsive to promotional marketing that so many companies in our industry hope will boost their volumes," he added.

He noted consumers were increasingly shopping in the less traditional channels of trade such as dollar outlets, club stores and online.

"The customer base infrastructure is changing. That means if we want our brands to compete effectively in those channels, we have to have the right price pack combination in a single unit to satisfy the consumer for that purchase occasion. And in more cases than not, a different pricepack architecture than they'd find in traditional stores," he said.

Grocery volumes in the US have been in the doldrums for a number of years and there are some concerns sales will struggle to rise this year, with economic gloom hanging over the country.

However, Vernon was optimistic about the outlook for the sector.

"I've heard the bearish talk about our industry's prospects and I'm just not buying it. Those who can adapt, can contemporise their offering, who can get their products in the right breadth of locations at the right price - they will prosper.

Nevertheless, he added: "We have to adjust. There's no question about it."

Sectors: Chilled foods, Condiments, dressings & sauces, Dairy, Meat & poultry, Snacks

Companies: Kraft Foods Group

View next/previous articles

Currently reading -

CAGNY: Kraft CEO: Food firms must adapt price, SKUs

There are currently no comments on this article

Be the first to comment on this article

Related research

Kraft Foods Group, Inc. - Strategy and SWOT Report

Kraft Foods Group, Inc. - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360° ...

Kraft Foods Group, Inc in Packaged Food (World)

A new global packaged food player was created in October 2012, as Kraft Foods Inc restructured its operations into two independently listed entities and spun off its North American grocery business under the Kraft Foods Group name. The company benefi...

The Future of the Prepared Meals Market in Italy to 2017: Market Size, Distribution and Brand Share, Key Events and Competitive Landscape

"The Future of the Prepared Meals Market in Italy to 2017: Market Size, Distribution and Brand Share, Key Events and Competitive Landscape" is the result of Canadean’s extensive market and company research. This report presents detailed analysis on t...

Related articles

US: Hormel, Hillshire linked to Unilever's Ragu

Speculation is mounting over the potential suitors for Unilever's Ragu brand, with the likes of Hormel Foods and Hillshire Brands touted as would-be acquirers alongside Post Holdings and Mizkan.

Editor's choice: the highlights on just-food last week

just-food brought you exclusive updates from some of the power players in our industry as the likes of Nestle, Danone and Kerry Foods set out their investment case at the Consumer Analyst Group of Europe conference in London this week. In other news, Sainsbury's booked its first like-for-like sales drop in nine years, General Mills continued to face pressure in the US and we spoke to FrieslandCampina CFO Kees Gielen. Here are the highlights from the past week.

Quote, unquote: just-food's week in words

The Consumer Analyst Group of Europe conference dominated news this week with updates from Kraft Foods Group, Glanbia and Nestle. Elsewhere GM was back in the spotlight with the UK Prime Minister's scientific advisers arguing the technology is safe. Also this week the political tensions in Russia and Ukraine saw Metro Group delay an IPO of its Russian cash-and-carry unit and Lidl announced the departure of chairman Karl-Heinz Holland.

Read more on this hot issue

CAGNY 2014

Mondelez International, PepsiCo and General Mills are among the manufacturers presenting to Wall Street at the annual CAGNY conference in Florida, with analysts keen to hear how the companies plan to grow in still tough trading conditions

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page