Kraft Foods’ net revenues rose 5.5% to $32.2 billion for 2004, due to increased marketing, new products and price hikes to offset higher commodity costs.
Kraft added $500 million to $600 million for consumer marketing and price adjustments (“price gap management”) to its 2004 marketing budgets (July 20, 2004 Xtra). Its marketing, administration and research costs totaled $6.5 billion for 2004, up nearly 9% from 2003.
Northfield, IL-based Kraft also realigned its portfolio, selling off its confectionery and yogurt businesses and buying Veryfine Juices, and concentrating marketing and R&D spending behind key brands including Fruit20 flavored waters, DiGiorno Microwave Rising Crust Pizza, Back to Nature natural and organic products and Tassimo single-serve coffeemaker.
“Kraft enters 2005 with improved momentum…. In a transition year in which we reorganized the company and began a significant restructuring program, we sequentially improved our top-line growth each quarter,” said CEO Roger Deromedi in a statement.
Kraft announced earlier this month that it will stop advertising less-healthful foods to kids six to 11 (Jan. 18 Xtra). Ad dollars will shift to all-family and parent-targeted media. Promotion spending isn’t expected to decline, especially for in-store work; efforts will target moms.
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