Kraft Tries New Strategy with This Move

Now a strictly North American business with a tighter focus, Kraft Foods Group (NASDAQ:KRFT) is splitting its operation into two companies in an effort to increase efficiency. Kraft has new presidents for each division and will begin accounting for each segment starting July 1. The company will release its first sales reports for the new model at the close of the third quarter.

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Since Kraft Foods Inc., an international powerhouse with $45 billion in annual sales, split to become Mondelez International (NASDAQ:MDLZ) and Kraft Foods Group in America, the company has focused on increasing brand awareness for its popular labels. Oscar Mayer, Maxwell House, Philadelphia, Planters, and Kraft Mac & Cheese all fall under the Kraft banner, but the new model will encourage more consolidation in marketing. The brands will now fall under Meals and Desserts (Cool Whip, JELL-O, Stove Top, and others) or Enhancers and Snacks (Miracle Whip, A.1., and Planters among them).

“We’re taking an important step to strengthen our focus on some of the most beloved brands in North America,” said Tony Vernon, chief executive of Kraft. He added that the new Kraft was “focused heavily on turbocharging [its] iconic brands” since splitting from Mondelez. The presidents of each division are veteran performers from within the company.

Michael Osanloo, who has been in charge of Kraft’s grocery business, will front the Meal and Desserts division. Osanloo had success with signature products including Kraft Mac & Cheese and the Velveeta line. Among his achievements is Velveeta Cheesy Skillets, which reinvigorated the well-known brand.

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Jane Hilk will helm the Enhancers and Snacks unit. Hilk currently serves as senior VP of marketing at Oscar Mayer, which will fall under the Enhancers and Snacks category. One of Hilk’s successes was the Oscar Mayer Selects line, a major winner for Kraft and now accounting for over $100 million in sales every year, according to The Chicago Tribune.

The new strategy is expected to assist in the marketing efforts of all of Kraft’s products as the company faces challenges from limited customer budgets and rising food costs.

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