Kraft to spread brands across two businesses

Kraft is to split its global food business into two separately run companies to provide “greater opportunities for its brands”.

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The food company will spin off its Oreo, Cadbury, Milka, Trident and LU brands to create a global snacks business with annual revenue of about $32bn (£19.6bn).

Its grocery brands including Philadelphia, Capri Sun, Maxwell House coffee and Jell-O, will become part of its North American grocery business estimated to have an annual revenue of $16bn (£9.8bn)

Kraft CEO and chairman Irene Rosenfeld, says of the businesses: “We have built two strong, but distinct, portfolios. Our strategic actions have put us in a position to create two great companies, each with the leadership, resources and strong market positions to realise their full potential. The next phase of our development recognizes the distinct priorities within our portfolio.”

Both businesses will be run separately and with different strategic priorities, growth profiles and operational focus.

Kraft hopes to launch the new companies before the end of 2012.

The move follows Kraft’s acquisition of Cadbury 18 months ago and the European biscuit company LU.

The announcement comes as Kraft reports a 13.3% increase in revenue to $13.9bn (£8.5bn) for the three months to 30 June. Gross profit increased 3.8% during the period.

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