Kraft Foods will spin off its North American grocery unit to provide the snack foods business more flexibility to purchase or divest brands, says chief executive officer Irene Rosenfeld.


Kraft Foods, Inc., Northfield, Ill., will spin off its North American grocery unit to provide the snack foods business more flexibility to purchase or divest brands, says chief executive officer Irene Rosenfeld. The grocery business rakes in about $16 billion in revenue and encompasses U.S. beverages, cheese, convenient meals and other food items. The snacks company, built from the European and the developing markets, and the North American snacks and candy businesses, will eke out $32 billion in sales.

The division is the “next logical step” in the company’s transformation since Rosenfeld became president in 2006, she says. The move will help Kraft advance snack products such as Cadbury chocolates and Oreo cookies into emerging markets while the slower-growing, higher-margin grocery business (Oscar Mayer meat and Maxwell House coffee brands) will expand in the United States and return cash to shareholders. Kraft is the world’s second largest food company.

Rosenfeld says that she will remain as chairman and CEO, although her future plans haven’t been revealed. The North American snacking business includes coffee, fruit drinks, cookies, candy and others.

Source: www.businessweek.com, chicagotribune.com