Kraft Gets Nutty

Plans to expand into “nut-butter” market

NORTHFIELD, Ill. -- As Kraft Foods Inc. prepares to split into the North American Grocery division and the Global Snacks division, the Northfield, Ill.-based company is looking to reinvigorate its grocery division with productivity initiatives and increased marketing, according to a report in Forbes.

The latest Planters marketing campaign targets adults, who consume two-thirds of the peanut-butter market in the United States. These are signs that Kraft is more aggressively pushing groceries as the division had somewhat stagnated with skeptics pointing out that the North American grocery market has matured, the report said.

Kraft’s investment in Planters has declined in recent years, which resulted in the brand’s market share dropping to 24% in 2011, from 32% in 2006, in the snack nuts market in the U.S. Planters is the iconic brand best known for its processed nuts.

However, after extending its Planters brand to peanut butter in 2011, the company is introducing two new hazelnut flavors to expand its offerings in the specialty nut-butter market. According to the company, Planters’ market share in the peanut-butter market has increased from 1.8% last year to mid-single digits. The Planters brand witnessed a 7% increase in revenues in 2011. The peanut-butter market is currently pegged to be around $1.8 billion in the United States.