Roger Deromedi, CEO of Kraft Foods, has said that, despite a challenging operating environment, the US food giant is making progress against its Sustainable Growth Plan, citing improvements in consumer brand value, a strengthened new product pipeline, solid growth in developing markets and benefits from the company's restructuring programme.

He said the progress was made amid some significant challenges that are confronting the food industry this year, including higher-than-anticipated commodity costs, energy and packaging costs, and a highly competitive European marketplace.

Deromedi also noted that the company is intensifying its efforts to find ways to simplify its processes, streamline its structure and empower employees to find even more time to focus on consumers.

"We're about a year-and-a-half into our Sustainable Growth Plan, and, although there is much work ahead, I believe Kraft is doing the right things to strengthen our business for the long-term," Deromedi said. "We're continuing to emphasise innovation, maintain our targeted price gaps and make significant investments in marketing to support our brands, even in the face of a difficult operating environment for many of our core categories."

The company projects new product revenues in 2005 to exceed US$1.5bn, including its South Beach Diet line of products, which recently achieved $100m in revenues after six months on the market.

Kraft reiterated its previous 2005 full-year guidance for earnings from continuing operations of $1.73-$1.78 per share, but added that category weakness due to higher retail prices and uncertainties in commodity costs continued to pose risks to this guidance.