US food giant Kraft Foods plans to focus on snacking in the near-term, with an emphasis on health and wellness.
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Speaking to analysts yesterday (4 August), chairman and CEO Irene Rosenfeld (pictured) said that Kraft’s innovation team will also continue to focus on value.
“We have certainly a number of items in our pipeline that would be more premium kinds of offerings and we have chosen to just hold those in abeyance while we wait for the economy to recover. I would say the focus of our near-term innovation pipeline is on snacking. It is on health and wellness products and continued focus on value.”
Kraft yesterday upped its guidance for 2009 diluted earnings per share to at least US$1.93 versus the previous forecast of $1.88.
Net income for the second-quarter to 30 June reached $827m from $745m in the previous year, while net revenues dropped 5.9% to $10.2bn as foreign exchange weighed on sales.
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By GlobalDataCFO Tim McLevish told analysts a “big piece” of the company’s future margin gains will also come from Europe.
“The EU has margin improvement opportunity and there is still some room in North America. Clearly we think there is upside across all of our geographies. Probably the biggest opportunity is in Europe and then developing markets. North America still has some but not the preponderance of it.”
Rosenfeld added that the company felt “quite good” about the progress it is making in Europe.
“Without a doubt 10% [operataing margins] is not our end goal but it is a significant improvement year-over-year and I think we have the programming in place to continue to make progress on our margins in Europe as well as elsewhere.”
Quotes from the conference call were taken from a transcript provided by Seeking Alpha. For the full transcript visit the Seeking Alpha website.
