Kraft Foods Inc. said on Wednesday it plans to focus on higher-margin, priority brands to boost productivity in Europe and will continue to cut costs as the food maker hopes to continue expanding worldwide.
Kraft, which recently made a $16.7 billion offer for Cadbury PLC, said it will focus on brands such as Milka and Cote d’Or chocolates; Oreos and Mikado biscuits; Carte Noire and Kenco coffee; and Philadelphia cream cheese. Kraft hopes this emphasis will help boost European revenue growth from businesses it already owns between 1 percent and 3 percent.
Kraft expects operating income margins will rise to the mid-teens by 2011, up from 12.3 percent in 2008.
Chief Financial Officer Tim McLevish said Kraft expects significant near-term savings in productivity as it continues to cut costs.
Earlier this week, Kraft disclosed it had offered $16.7 billion in cash and stock for Cadbury, a British candy maker. Cadbury, the second-largest global candy maker, rejected the offer, saying it wasn’t high enough.
Kraft CEO Irene Rosenfeld is still making a case for the deal, which would expand Kraft’s market presence. A Kraft-Cadbury combination would have more than $50 billion in combined revenue.
{{/usCountry}}Kraft CEO Irene Rosenfeld is still making a case for the deal, which would expand Kraft’s market presence. A Kraft-Cadbury combination would have more than $50 billion in combined revenue.
{{/usCountry}}Consumers can already find Kraft’s products in 150 countries worldwide, such as its namesake Kraft cheese, Maxwell House coffee and Oscar Mayer meat.
Kraft is based in Northfield, Illinois.