NORTHFIELD, Ill. -- Kraft Foods Inc. plans to turn Oscar Mayer meats into a separate business unit as part of a change the largest North American food company hopes will make all its businesses more accountable, a spokesperson said.
The overhaul of reporting lines will break Kraft's five North American business sectors into eight business units, Lisa Gibbons told Reuters. Those units are beverages, cheese, pizza, snacks and cereals, Oscar Mayer, foodservice, grocery and Canada, she said. The restructuring is planned for early 2008.
The company also plans a similar restructuring of its international business, largely along geographic lines, said the report.
We really feel like this is all about creating accountable business units, Gibbons said.
In February, Kraft said its plan under CEO Irene Rosenfeld was to rewire the company for growth.
Separating Oscar Mayerformerly in Kraft's convenient meals sectorcould highlight a business analysts have often said the company might sell.
But Rosenfeld said in an interview with Reuters earlier this year that the company was pleased with Oscar Mayer's performance in the past two years. Oscar Mayer remains a core business for us, Gibbons said. It's a billion-dollar business for the company.
In 2006, Oscar Mayer sales rose more than 8% to about $3 billion, compared with a less than 1% increase to $34.4 billion for the company as a whole. But the business is also facing increasing competition, with meat processors such as Tyson Foods Inc. and Smithfield Foods Inc. expanding offerings.
Edward Jones analyst Matt Arnold said separating Oscar Mayer could just mean the company wants to highlight its performance. They are trying to put something right in front of investors' noses, Arnold told Reuters.
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