One of the largest branded food and beverage companies in the world, Kraft Foods Inc. (KFT) has recently introduced a new line of peanut butter, Planter NUT-rition under the leading snack nut brand, Planter. Planter NUT-rition is available in three flavors, Berry Nut, Banana Granola Nut and Cinnamon Raisin Granola Nut.
This new variety contains wholesome ingredients like bananas, berries, raisins, cinnamon, granola and nuts apart from the traditional peanut butter base. True to its name, this combination makes the product highly nutritional and a great source of energy. One serving (2 tablespoons) of Planter NUT-rition contains 6 to 7 grams of protein and at least 5 kinds of vitamins and minerals.
Given the rise in lifestyle diseases, more people are concerned about the nutritional value of packaged food. The stress is on producing food products with simple natural ingredients with minimum preservatives and optimum processing. On the other hand, there is an increasing demand for new varieties of healthy packaged food products that help to serve quick meals and also satisfy taste buds. Kraft is focused on catering to these demands by bringing in product innovation and increasing the nutritional value of its food products.
Recently, the board of directors at Kraft Foods Inc. has approved the spin-off of the company’s North American grocery operations. The spin-off process will be completed on October 1, 2012. Following the process, the North American grocery operations will be called Kraft Foods Group, Inc.
Kraft Foods Group, which includes North American grocery operations, consists of the current US Beverages, Cheese, Convenient Meals and Grocery segments and the non-snack categories in Canada and Food Service. Introduction of Planter NUT-rition has been a part of the product innovation strategy of the North American grocery operations.
We currently have a Neutral recommendation on Kraft Foods Inc. The stock carries a Zacks #3 Rank (a short-term ‘Hold’ rating).
Overall we like Kraft Foods’ diverse brand portfolio, focus on innovation, strong momentum of power brands and significant exposure to the fast-growing emerging markets. We consider the spin-off of its North American business a positive, since it will enable Kraft to focus on its distinct strategic priorities and allocate resources optimally.
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