Restructuring / Turnaround Strategies Case Study

Roger Deromedi: Solving the Brand Portfolio Problems at Kraft Foods Inc

Abstract:
Kraft Foods Inc., the number one food and beverage company in the US and number two in the world, was known for its big brands like Kraft and Philadelphia, in the cheese category. During the 1990s, the company launched a string of brands in succession after acquiring General Foods and Nabisco Holdings Corp., and moved into other categories like crackers, snacks and pizzas. As Kraft expanded into more food categories, it launched more brands in the form of brand extensions, overloading its brand portfolio. When the private label competition with its lower prices hit the big brands, Kraft Foods discovered that it was losing on the new product development front. With no hard-to-replicate features that could differentiate Kraft from private labels, customers increasingly shifted to the private labels. As Kraft Foods Inc. was busy promoting new brands, it missed major market trends in low-carbohydrate diet alternatives and organic foods. Roger Deromedi, who took over as Chief Executive Officer of Kraft Foods Inc. in 2003, initiated steps to restructure and realign the brand portfolio.

Pedagogical Objectives:

• To discuss the importance of maintaining equilibrium between new brands and new innovative products for effective management of brand assets of the company
• To discuss the effect of too many brand-launches in the form of brand and line extensions that lead to diluted brand image and brand cannibalisation.

Keywords : Roger Deromedi, Brand portfolio management, Brand extensions, Kraft Foods Inc, Private label threat, Line extensions, Brand cannibalisation, Brands & Branding Case Study, Product innovations, Nabisco Oreo crackers, Brand divestments, Brand equity, Brand value, Brand variants