Kraft Foods: Pizza Helps it Grab Bigger Slice of Market

According to the Chicago Tribune, “Tim Cofer practically gushes about Kraft Foods Inc.‘s frozen pizza. As the company’s head pizza guy, he gets paid to do that, but he does have bragging rights. Kraft is the largest U.S. frozen pizza maker, and pizza is a hive of growth and innovation for the Northfield-based company.”

“Kraft has racked up seven consecutive quarters of double-digit sales growth in the category, and pizza has been a prime driver of Kraft’s fastest-growing U.S. segment, its ‘convenient meals’ business. So does this look like the hallmark of a “low growth, conglomerate business” as Roger Carr, chairman of Great Britain’s Cadbury PLC, dismissively referred to Kraft?”

“Carr’s company, of course, is fighting Kraft’s unsolicited $16 billion-plus takeover bid, so his criticism has to be taken with the grain of salt. Yet some analysts say that while Carr’s judgment is overly harsh, it also contains a hint of truth. For all its success in pizza or with thriving classic brands like Oreo, Kraft still struggles with weak or no growth in key areas, and Planters nuts serves as a prime example. Despite innovation and marketing pushes, Kraft has watched the venerable brand that gave the world Mr. Peanut continue to lose sales and market share, primarily to private-label products, and that’s an issue Kraft grapples with in several other categories, most famously in cheese.”