With 100,000 employees adhering to Kraft’s new mantra “Make today delicious,” things at the food giant have gotten pretty tasty.
Take, for instance, the progress made toward Irene Rosenfeld’s three-year transformation plan to return Kraft to reliable growth.
With its final six months in sight, Kraft has realized $1 billion in savings through a multiyear program that streamlined its manufacturing processes. The initiative will save an additional $200 million through 2009.
The Northfield, Ill.-based company brought in that amount ($200 million) in incremental revenue in 2008 with its Wall-to-Wall initiative, which focuses on having one sales lead manage all Kraft brands at a single store.
The plan has facilitated more cross-promotions, creative product displays and stronger relationships with each store, according to Kraft.
It expects an extension of that concept — High Visibility Wall-to-Wall to drive an additional $200 million in revenue. The plan will increase sales resources in large, higher-turnover stores.
Rosenfeld has also helped Kraft’s senior leaders — half of whom are new to their roles, or new to Kraft — help themselves. She’s given business unit leaders full control of their income statements and balance sheets.
Then there is the success realized through simplifying its categories. “As I tell my folks all the time, we can do anything but we can’t do everything,” said Rosenfeld.
To that end, she’s pared the categories and markets Kraft focused on overseas. The strategy has been particularly effective. International markets were responsible for 43% of Kraft’s net revenue, or $18 billion, in 2008, Rosenfeld said.
“Outside North America, the company was focused on 150 brands in more than 150 countries,” she said. “We were a mile wide and an inch deep — not very simple and not very focused.”
Rosenfeld narrowed her gaze to five categories, 10 brands and 10 international markets. Today, the 10 brands represent 40% of Kraft’s revenue, and the 10 priority markets, about 60% of international sales.
“That’s our simple pragmatic approach to focusing where it matters most, and as you can see, it’s working,” Rosenfeld said.
— Julie Gallagher