Kraft to bolster key brands in Europe

Kraft, the US food company, is well positioned to split into two separate companies later this year, according to its chief executive, after sales of its key brands in Europe and North America put it on track to deliver “top tier” growth in 2012.

Oreo

The business said it would step up marketing activity for its core brands, such as Oreo and Cote D’or following its spin-off into two companies.

European revenue rose 7.5% for the full year to December 2011, compared to a 5.1% increase in North America over the same period.

The company had reported a 6.6% growth in fourth quarter revenue to $14.7bn (£9.4bn), while revenue for the year was up 10.5% to $54.4bn (£34.4bn).

Irene Rosenfeld, Kraft’s chief executive, says that the company expects to deliver “top-tier” growth this year ahead of its October split into a global snack offering which will focus on brands such as Cadbury and Oreo, and a separate US grocery division, which will assume responsibility for brands including Maxwell House coffee and Oscar Mayer lunch meat.

She adds: “”Growth was especially strong in our global snacks portfolio. It now represents about half of our sales. The challenge remains in Europe and North America where gum and candy were down mid-single digits.”

The report, which marks Kraft’s final earnings update as a single business, revealed that costs of its separation into two companies could total as much as $1.8bn (£1bn).

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