ABSTRACT
Kraft was the largest packaged-foods company in North America. In the United States, it dominated grocery store shelves for years, with such famous brands as Jell-O, Kool-Aid, Life Savers, Oreo cookies and Philadelphia Cream Cheese. However, Kraft found itself stuck in a slow-growth industry in the United States. Despite careful cost cutting and imaginative marketing, sales dropped 16 percent over a seven-year period. Furthermore, Kraft’s strongest overseas market was Western Europe, a market that was nearly saturated as well. As a result, Kraft decided to expand into emerging markets. The company identified China, Russia, Brazil and Southeast Asia as the growth engines of the international market. 1
Unfortunately, Kraft’s strongest products-convenience foods such as Kraft Macaroni & Cheese-don’t sell as well in developing countries where consumers have less disposable income. To better address this issue, the company decided to split in two. Kraft would retain the slowgrowth but profitable North American convenience-foods business. The new spin-off company, Mondelez, received the company’s snack brands.
