NORTHFIELD, Ill. -- Kraft Foods Inc. unveiled new products Wednesday in its continuing effort to boost sales and profits in a crowded, competitive market, according to a report from Crain's Chicago Business.
The new items include macaroni-and-cheese-flavored crackers, granola bars that boast of digestive health benefits and Cool-Whip in an aerosol can. In total, Kraft plans to launch 80 new products, on par with past years.
“We are spending much more time and focus on reinventing our iconic brands,” said Bob Becker, senior vice-president of new products for Kraft Foods [image-nocss] North America.
The Northfield, Ill.-based company is focusing its new offerings on four areas: snacks, convenient meals, health and wellness, and premium items. Among other items introduced Wednesday are Planters Kettle-Roasted Peanuts; single-serve deli slices of meat; and beefier-tasting Oscar Mayer hot dogs. Kraft also is coming out with more 100-calorie snack packs, Crystal Light beverage sticks and flavors of microwaveable pizzas.
“Almost all of the new products are line extensions rather than major new innovations,” said Marilyn Raymond, a partner with Arbor Strategy Group, a consultancy in Ann Arbor, Mich., that works with foodmakers, including Kraft, to develop new products.
Kraft CEO Irene Rosenfeld, in the second year of her three-year turnaround plan, has stressed the need for innovation to drive growth.
“New products are very important,” Gregg Warren, an analyst in Chicago with Morningstar Inc., told the newspaper. “New products allow you to charge high prices, and in this environment you are looking to raise prices to cover higher commodity costs.”
Last year, the foodmaker boosted sales 8.4% to $37.24 billion, but net earnings fell 15.4% to $2.59 billion due to higher commodity costs and increased spending on marketing, product development and restructuring, according to the report.
Warren said Kraft has had some success in recent years with new products, such as microwaveable macaroni-and-cheese bowls. It also has touted the success of a new cake version of Oreos and DiGiorno Ultimate pizzas with premium ingredients.
The challenge for Kraft, Warren said, is that with more than $37 billion sales, it 's difficult for new products to provide a substantial sales boost to the nation 's largest food company.
"Any new product has to be really big to make any difference," he said. "Some of their innovations seem good, but many aren't really driving growth."Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.