Krafting New Products

Published in CSP Daily News

Kraft to move foodservice beyond the roller grill

OAK BROOK, Ill. -- Six months after announcing the sale of its nonchocolate candy and mint businesses to the Wm. Wrigley Jr. Co., Kraft Foods Inc. is assuring retailers that it is not planning to sell off other portions of its business and that, in fact, those other business categories will benefit from the candy sale.

I know that's been out in trade publications [that the Oscar Meyer business is for sale], said Jim Sterbenz, Kraft's vice president of sales for convenience stores, during a CSPNetwork cyberconference, What Kraft Can Do for You on Wednesday. [image-nocss] Our CEO, Roger Deromedi, at a recent investment group meeting, provided a vote of confidence that Oscar Meyer is absolutely not up for sale, and we view the Oscar Meyer business as a vital growth engine in North America.

To view an on-demand rebroadcast of this cyberconference (FREE - RETAILERS AND WHOLESALERS ONLY), click here.

Chicago-based Wrigley announced its plan to purchase the candy and mint businesses, which include brands such as Altoids, Life Savers and Cr ame Savers, from Northfield, Ill.-based Kraft in November. Earlier this month, the U.S. Federal Trade Commission (FTC) closed its investigation of the $1.48 billion seal without taking action, clearing the way for the deal to close by midyear.

Wrigley picked up great brands with $550 million in sales across all channels in North America, and they'll do what they do best, which is drive those businesses to new heights, Sterbenz said. And we get $1.48 billion in return that we will use to transform other parts of our portfolio and [grow other areas].

In the near term, that will include growing Kraft's foodservice business with the introduction of several news products, said Jim Joynt, Kraft's customer marketing manager. Our plan is to grow foodservice. We've had double-digit growth for the last three years. We're not satisfied with that, he said. We intent to continue to grow our foodservice business in double digits, and we know in order to do that, it's not merely picking up another hot dog contract; it has to come from product innovation. So if you stay tuned over the next six months, you'll begin to see some additional offerings from our foodservice company.

Among the first new innovations are South Beach branded wrap sandwiches and Tombstone Microwave Pizza, products that go beyond the roller grill.

Foodserviceis not really a discussion about a roller grill. It's actually a host of hot-food solutions that in today's world would include new Tombstone Express Microwave Pizza, Joynt said. But even if we just talked about the roller grill, it's more than that. It's about: What size product do you want to offer? What particular price point are you looking to achieve? And do you want more than just hot dogs? We do offer an array of specialty links and wrap dogs for your consideration.

Some other new products in Kraft's pipeline:

Planters will launch a line of premium tube nuts starting at the end of this year. The line will include shelled pistachios, deluxe mixed nuts and macadamia nuts. Kraft's Big Bag lineup will be retooled into a gusset pouch that will conveniently fit in a cupholder. It also will be resealable. The company's Crystal Light On the Go is showing promise, according to the company. The flavor-mix additive for bottled water is averaging around 15 units per store per week. That's about $5 of incremental revenue above your bottled-water sales, said Joynt, and we haven't even hit the prime-selling season for bottled water.