Punch line: Since splitting earlier this year, Kraft Foods and Mondelez are both pursuing similar growth strategies: trimming slower, smaller brands and focusing efforts on powerhouse brands to drive economies of scale.
* * * * *
Excerpted from brandchannel’s, “The Kraft/Mondelez Dilemma: Which Brands to Trim, Which Brands to Boost?”
One of the main reasons for Kraft to split into its new Kraft Foods and Mondelez International units was to free the latter to pursue the beckoning opportunities in the global snacking business without being tied down to the slower-growth, mature North American groceries business.
Both newly independent entities are pursuing something of the same strategy to tap into their separate growth opportunities: paring back non-performing, small brands, and applying innovation resources and expansion ambitions to big brands
Mondelez has said that it may divest some products as it seeks to streamline its range. The company will pursue a “simplification agenda,” Tom Cofer, head of Europe, confirmed to Bloomberg.
Not to be outdone, Kraft Foods also is planning “product pruning.” Kraft hasn’t indicated what products and brands it will trim, but analysts have speculated that Oscar Mayer, Gevalia coffee, Jell-O and Planters comprise a list of “power” and “jewel” brands safe from disposition. On the other hand, Breakstone sour cream, Grey Poupon mustards and A-1 steak sauces could be targets for divestiture.
Kraft Foods’ board of directors, meanwhile, just approved a $650 million “restructuring, related implementation and spinoff transition program,” the company reported in an SEC filing, which includes severance, asset disposal and professional service fees.
Mondelez has indicated that it will be creating new synergies among the many powerhouse brands in its stable … to supercharge growth especially in emerging markets including the Middle East, even as it trims in more mature markets, such as Canada.
So, for instance, Mondelez is leveraging a “nervous” Cadbury’s long presence in India to help growth of its Oreo brand, in part by packaging Oreos in that market in Cadbury’s signature purple packaging rather than the red and white of Oreo’s Nabisco brand.
Mondelez also is trying to goose growth with marketing innovations such as its use of a new digital-advertising diagnostics tool and by its plans to crowdsource some marketing tactics in Europe.
Significant growth is what Mondelez, and Kraft Foods, need — otherwise, what was the split for?
Edit by BJP
* * * * *
Follow on Twitter @KenHoma
The Homa Files 
Leave a comment