Recession Cannot Affect Kraft Foods

 

 

 

 

 

 

 

 

Consumer spending patterns during the current economic recession have trended toward lower- priced options, whether with respect to necessities or discretionary items. Among the essential purchases, food label options have dwindled as manufacturers and retailers have dropped numerous items from the store shelves.

Kraft Foods (NYSE: KFT) for example has eliminated many less profitable items from its product lines, dropping labels like the South Beach Living frozen meals. As a result of the reduction of product offerings and the impact of currency valuations, Kraft is projecting a decline in first-quarter 2009 revenues of 5%.
Kraft Chief Executive Officer, Irene Rosenfeld, is nonetheless projecting overall revenue growth for the year to reach 3%. Rosenfeld has noted that Kraft is less affected than its competitors by consumers trending to so-called "white label" store brands, stating that private labels have had less than a 1% impact on Kraft revenues.

With consumers looking increasingly for value in their food purchases, Kraft's line of packaged food products, snacks, beverages, cheeses and convenience meals at modest prices is attractive, reducing the company's earnings from exposure to the recession.

Read the full story here.

Recessing Cannot Affect Kraft Foods

 

 

 

 

 

 

 

Consumer spending patterns during the current economic recession have trended toward lower- priced options, whether with respect to necessities or discretionary items. Among the essential purchases, food label options have dwindled as manufacturers and retailers have dropped numerous items from the store shelves.

Kraft Foods (NYSE: KFT) for example has eliminated many less profitable items from its product lines, dropping labels like the South Beach Living frozen meals. As a result of the reduction of product offerings and the impact of currency valuations, Kraft is projecting a decline in first-quarter 2009 revenues of 5%.
Kraft Chief Executive Officer, Irene Rosenfeld, is nonetheless projecting overall revenue growth for the year to reach 3%. Rosenfeld has noted that Kraft is less affected than its competitors by consumers trending to so-called "white label" store brands, stating that private labels have had less than a 1% impact on Kraft revenues.

With consumers looking increasingly for value in their food purchases, Kraft's line of packaged food products, snacks, beverages, cheeses and convenience meals at modest prices is attractive, reducing the company's earnings from exposure to the recession.

Read the full story here.

KRAFT might see reduced volume in 1st quarter of 2009

Kraft Foods Executives are expecting that growing private label brands might affect Kraft volume performance in the 1^st quarter of 2009 after the declined performance in the last quarter of 2008. The topic was discussed at the annual confab of the Consumer Analyst Group of New York.

Inspite of volume loss, Kraft made 6% of increase in revenue in the fourth quarter. This increase was made possible due to increased prices which again pulsated by rising commodity costs. Kraft also discontinued some unprofitable products from the market.

Tuesday, Kraft's Chief Financial Officer Tim McLevish told analysts that Kraft also expects first quarter sales volume to fall another 5 percent. "The crisis of confidence that hit consumers in the fourth quarter is still with us."

 

However Kraft expects to improve the volume share after 2^nd quarter.  Analysts believe the sole reason for decline is the susceptive behavior of Kraft towards cheaper and private label brands which are gaining the volume in recession.

10 Things the Food Industry Doesn't Want You to Know

1. Junk food makers spend billions advertising unhealthy foods to kids.
2. The studies that food producers support tend to minimize health concerns associated with their products.
3. Junk food makers donate large sums of money to professional nutrition associations.
4. More processing means more profits, but typically makes the food less healthy.
5. Less-processed foods are generally more satiating than their highly processed counterparts.
6. Many supposedly healthy replacement foods are hardly healthier than the foods they replace.
7. A health claim on the label doesn't necessarily make a food healthy.
8. Food industry pressure has made nutritional guidelines confusing.
9. The food industry funds front groups that fight antiobesity public health initiatives.
10. The food industry works aggressively to discredit its critics.

 

Read the full article here