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Kraft to Open Two New Units

Zacks Equity Research

Packaged food and beverage company Kraft Foods Group Inc. (KRFT) recently announced that it intends to create two new standalone business units from Jul 1, namely Meals and Desserts and Enhancers and Snack Nuts.

Kraft currently operates through five segments, Beverages, Cheese, Refrigerated Meals, Grocery and International & Foodservice.  

The company will reorganize the brands in the grocery segment to create the two new units. Grocery includes nuts, peanut butter, dressings, barbecue sauces, marshmallows, dry packaged desserts, refrigerated gelatin and pudding snacks, chocolate and baking ingredients. The segment includes brands like Planters, Kraft and Kraft Deluxe, Kraft and Miracle Whip, Baker’s, Jell-O, Cool Whip etc. Similar products like Cool Whip and JELL-O will be placed under the Meals and Desserts segment whereas ingredients and nut products under brands like Planter will be be a part of the Enhancer and Snack nuts segment.

The Meals and Desserts unit will include whipped topping, marshmallows, dry packaged and ready-to-eat desserts, packaged dinner, coatings, stuffing mix and Velveeta dinners and meal kits under popular brands Cool Whip, Jet-Puffed, JELL-O, Kraft Mac & Cheese, Shake 'N Bake and Stove Top. The segment will be led by Michael Osanloo.

The Enhancers and Snack Nuts unit will include steak sauce, mustards, barbecue sauces, dressings, peanut butter under brands like A.1, steak sauce, Grey Poupon, Kraft and Bulls-Eye, Kraft and Good Seasons, Kraft and Miracle Whip and Planters. The segment will be led by Jane Hilk.

The segregation of brands into two business units will help the company improve its efficiency, focus and resource allocation. All the segment leaders will report directly to CEO Tony Vernon.

Kraft Foods Group carries a Zacks Rank #2 (Buy).  

Other food companies that have been doing well consistently are Flower Foods Inc. (FLO),  B&G Foods Inc. (BGS) and Omega Protein Corp (OME) all carrying a Zacks Rank #1 (Strong Buy).


Read the Full Research Report on BGS

Read the Full Research Report on FLO

Read the Full Research Report on OME

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