Kraft Foods has indicated that the revamp of the management of its businesses in western Europe is expected to deliver top- and bottom-line growth in the region.
Go deeper with GlobalData
On Monday (15 December), the US food giant announced plans to separate the management of its businesses in western Europe from the rest of its international units.
Kraft has appointed Michael Clarke as president, Europe. Clarke will report directly to Kraft CEO Irene Rosenfeld.
Sanjay Khosla, president of Kraft International, will continue to lead the businesses in developing markets, reporting to Rosenfeld. He will also assume additional responsibilities for Kraft’s global category teams in snacking and beverages in North America, Europe and developing markets.
Kraft said the shake-up of its international operations and the integration of the Lu biscuit business is expected to drive growth in Europe and further afield.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“We believe this structure will build on the momentum we’ve created in Europe, accelerate our growth in crucial developing markets and better leverage our global category opportunities,” a spokesperson for the company told just-food.
“For Europe, we are confident that Mr Clarke’s experience and track record of success will build on our momentum in that region, where we have posted our best European business results in many years.”
European sales in the first nine months of Kraft’s current fiscal year increased by 54%, rising to US$8.36bn. Gains were fuelled by the acquisition of the Lu cookie and cracker business from Danone, which was completed in the previous financial year.
“Our acquisition of the Lu biscuit business is on track, growing strongly and, as expected, will be accretive to our 2008 earnings,” the spokesperson said. “In fact, we will beat our original business plan, and in 2009, we expect to realise significantly more synergies from our Lu biscuit acquisition.
“We see great opportunities to leverage our biscuits business further for profitable growth. We have substantially increased our footprint and distribution strength in key markets.”
The spokesperson also indicated that the Lu business provided a “strong platform” in health and wellness and affordable nutrition: with brands such as Juh Guy in China, which provides added calcium, and Biskuat, which delivers nine vitamins, six minerals plus “the goodness of milk” in Indonesia and Malaysia.
“In sum, we are quite pleased with this acquisition, and even more confident it will be a significant platform for the future growth and profitability of our international business,” the spokesperson explained.
“The Lu biscuit business has added substantially to operating results, but even excluding the acquisition, EU operating profit was up strong double-digits as higher pricing and favorable product mix more than offset higher input costs. As we continue to integrate the Lu biscuit business, we will deliver more revenue and cost synergies, which will drive improved top- and bottom-line performance.”
