Kraft says investment in brands boosted sales

Kraft says its “solid performance” in the third quarter was boosted by its strategy to “significantly step up” its investment into building its brands.

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The food manufacturer reported a 26% increase in sales to $11.9bn (£7.5bn) in the three months to 30 September “impacted favourably” by the Cadbury acquisition.

Irene Rosenfeld, Kraft chairman and CEO, says: “We had another good quarter, and we’re executing well. Our global growth strategy of focusing on snacking and Power Brands gives us a clear path to top-tier performance.

Kraft’s Power Brands include: Kenco, Philadelphia, Dairylea and Oreo.

Rosenfeld adds: “The Cadbury integration has proceeded smoothly and quickly, and we’re already benefiting from significant cost synergies. I remain confident that we will achieve our goals for 2010 and accelerate our growth in 2011.”

In Europe, Kraft sales increased by 1.1% driven by 3% growth from its Power Brands wile Cadbury sales declined 0.4% as a weak performance in Southern Europe offset solid growth in Britain and Ireland.

Separately, Starbucks announced in its fourth quarter results yesterday (4 November) that it planned to end its 12-year, $500m (£308m) grocery distribution relationship with Kraft.

Kraft has rebutted this claim in a statement saying its distribution agreement with the coffee chain regarding the sale of Starbucks packaged coffee in grocery stores and other channels is “perpetual”.

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