Kraft Foods

Kraft Foods is the largest U.S.-based packaged food company, with more than 70 major brands. Today's Kraft Foods is a result of the merger of a number of major food companies over the years and, finally, the acquisition by Philip Morris Cos. of Kraft and General Foods Corp. James L. Kraft began his cheese business in 1903 in Chicago. Recognizing the inconsistent quality of cheese available to consumers, he developed a method of blending and heating a variety of natural cheeses to produce a more consistent, high-quality product, a process patented in 1916. By 1920, the company had begun producing process cheese in loaves under the Kraft brand. In 1928, the company merged with Phenix Cheese Co. to become Kraft-Phenix Cheese Corp., which was acquired in 1930 by National Dairy Products Corp. Kraft was an independent operating company of NDPC until it was assimilated into the parent organization, which was renamed Kraftco Corp. in 1969. The company was renamed Kraft Inc. in 1976. In 1988, Philip Morris acquired Kraft and in January 1989 merged it with General Foods, which Philip Morris had acquired in 1985, to form Kraft General Foods. In January 1995, Kraft General Foods was reorganized into product-based business divisions and renamed Kraft Foods. Early ad campaigns Mr. Kraft was personally responsible for the company's early advertising efforts. Kraft introduced and trademarked the Johnny Appetite character, which was used for in-store displays and in Kraft print ads in local markets. In 1919, the company established its own advertising department. That year, Kraft became the first company in the cheese industry to launch a national advertising campaign, running a $40,000 print effort in national women's magazines. Kraft also began experimenting with color advertising that year and ran its first national color ad in 1921 in the American Weekly, a Hearst Sunday supplement. Kraft used hand-colored ads until the late 1940s, when the company adopted color photography. In 1924, working with General Outdoor Advertising Co., Kraft began advertising on billboards. By 1929, the company's annual ad budget was more than $1 million. The merger of Kraft and Phenix in 1928 led to significant changes in Kraft advertising. On Jan. 1, 1930, J. Walter Thompson Co. became the company's agency. Phenix had been using JWT since 1922 for its Philadelphia Brand cream cheese, and the agency had been responsible for Kraft's advertising in England since 1927. Kraft-Phenix's home economics department, the forerunner of today's Kraft Kitchens, was one of the company's greatest advertising assets. Established in 1924 to create educational materials for American consumers, the department provided recipes featuring new ways to incorporate cheese into meals. Through the years, Kraft offered recipes in print ads, commercials, in-store displays, direct-mail campaigns and promotions. Although Kraft executives had originally been skeptical of radio's effectiveness as an ad medium, the company's radio advertising soon began to complement its print efforts and quickly became an integral part of the advertising mix. Kraft-Phenix first took to the airwaves in 1929 with "Forecast Radio School of Cooking," which it sponsored through the 1931 season. The show was broadcast three mornings a week on NBC stations to homes in the eastern and midwestern U.S. Kraft-Phenix expanded its radio reach to the West Coast later in 1929 as a sponsor of the "Woman's Magazine Hour." The 1930s and '40s During the 1930s, Kraft-Phenix, then owned by NDPC, began to bring its products directly to consumers through exhibitions. The 1933-34 Century of Progress Exhibition in Chicago served as the stage from which Kraft launched its Miracle Whip salad dressing; visitors to the Agricultural & Foods Building could watch the product being made in a glass-enclosed, air-conditioned room. Within a short time, demand for Miracle Whip was so great that stores could not keep it on their shelves. In the second year of the exhibition, Kraft demonstrated production of its Philadelphia Brand cream cheese. At the San Diego California Pacific International Exposition in 1935, Kraft featured displays of cheese and salad dressing production. Kraft products were also offered for sale. The 1939-40 New York World's Fair featured a similar exhibit and a lunch counter. Encouraged by its initial sales results for Miracle Whip in the eastern U.S., Kraft decided to offer consumers a "double-your-money-back" guarantee. To launch this offer, Kraft worked with JWT to develop a radio program for the company. The agency suggested a musical variety program hosted by Paul Whiteman. "Kraft Musical Revue" premiered June 26, 1933, in the New York metropolitan area and New England and was an overwhelming success. The Association of National Advertisers ranked the program as one of radio's four most popular shows within two months of its initial airdate. The show aired on 53 NBC stations every week. The popular program underwent a series of name changes during the 1934 season. It was referred to as "Kraft All-Star Revue," "Paul Whiteman's Musical Hall" and finally "Kraft Music Hall." Among the hosts of the show during its run, which lasted until 1949, were Bing Crosby and Al Jolson, who had starred in the premiere. In addition to "Kraft Music Hall," Kraft sponsored many other radio shows, most of which were summer replacement programs for "Music Hall": "The Great Gildersleeve" (1941-54), "Summerfield Band Concert" (1947), "The Adventures of Archie Andrews" (1949), "Marriage for Two" (1949-50), "The Falcon" (1950-51), "Queen for a Day" (1951-52), "The Bobby Benson Show" (1951-52), "The Edgar Bergen Show" (1954) and "Kraft Five Star Newscast" (1955-57). In Canada, Kraft sponsored "Le Cafe-Concert" Kraft (1941-50), a program similar to "Music Hall." In a 1938 speech to the Chicago Federated Advertising Club, Kraft Ad Manager John Platt reviewed the company's philosophy of radio advertising, insisting that entertainment and advertising must be kept separate and distinct. (For this reason, Kraft insisted that an announcer, not cast members, read its commercials.) According to Mr. Platt, quality entertainment led listeners up to the commercials, dropped them into the commercials and took them back to the show. To be effective, Kraft commercials were single-product-focused, short and to the point. Although this formula evolved through time, its basic principles remained intact. Foray into TV Kraft began TV advertising on an experimental basis in 1947. The first one-hour live drama series on TV, "Kraft Television Theatre," aired May 7, 1947, on NBC station WNBT-TV in the New York area, which at the time reportedly had fewer than 8,000 TV sets. The series was produced and directed by JWT. To test the effectiveness of the new medium, a less well-known Kraft product, Mac Laren's cheese, was advertised on the early TV programs. This premium-price cheese received little ad support prior to those commercials. Although critics' early reactions to the program were mixed, the cheese flew off store shelves. In Kraft's TV commercials during this program, the product was the star. The commercials were recipe-based and developed in the Kraft Kitchens. With voice-over by Ed Herlihy, the ads became known as "hands commercials" because they showed only the hands of the demonstrator. This style of presentation, Kraft's ad executives reasoned, would help the homemaker to imagine herself preparing the recipe in her kitchen. Mr. Herlihy served as the voice of Kraft for more than 40 years. A commercial featuring a clam dip made with Philadelphia Brand cream cheese and a recipe booklet offer exemplifies the effectiveness of the "hands" approach. Two days after the commercial aired, grocery stores sold out of canned clams, and the response to the recipe booklet offer was 500% greater than anticipated. Kraft was the first advertiser to air food commercials in color. The company, working with JWT, began experimenting with color spots in 1953, despite the scarcity of color TV sets at the time. In 1956, Kraft began broadcasting "Kraft Television Theatre" in color every Wednesday night. In April 1958, Talent Associates Ltd. took over production responsibility for "Kraft Television Theatre" from JWT, and the program's name was changed to "Kraft Theatre." The format and title of the series were changed again when "Kraft Mystery Theatre" began airing in June 1958. The final episode of the series aired Oct. 1, 1958. The demise of "Kraft Television Theatre" did not signal a decision to stop sponsoring quality TV programming. Subsequent shows included: "Bat Masterson," a half-hour western that ran for a year starting in October 1958; a revival of the "Kraft Music Hall" that ran from October 1958 to May 1959 with host Milton Berle; "Kraft Music Hall Presents the Dave King Show" (summer 1959); "Kraft Music Hall" with host Perry Como (1959-63); "Kraft Suspense Theatre," an anthology drama series produced by Revue Productions and Roncom Productions (1963-65); "Kraft Music Hall Presents the Andy Williams Show" (1965-66); and "The Road West," a one-hour western (1966-67). "Kraft Music Hall" did not have a permanent host from 1967 through the 1970 regular season. From 1968 through 1987, the "Country Music Awards" were broadcast as part of the series, and from 1969 through 1987, the company was a co-sponsor of "America's Junior Miss Program." "Kraft Music Hall" continued during the summers from 1969 through 1971. By the fall of 1971, Kraft no longer sponsored a weekly TV program. Instead, the company sponsored five or six annual specials, in addition to a dedicated schedule of advertising in network prime time, daytime and children's programming. To further enhance consumer interest, in 1975 Kraft began placing recipes in ad inserts in TV Guide during the weeks that the specials aired, a tie-that continued until late 1987. In 1978, Kraft undertook what was then the most extensive marketing campaign in the company's history to mark the 75th anniversary of J.L. Kraft's founding of the company. Foote, Cone & Belding created the "family reunion" theme to celebrate 75 years of bringing good food and families together. The campaign had its own theme music and featured three TV specials, including the "Kraft 75th Anniversary Special." A radio special, consumer promotions and sweepstakes were also part of the campaign. Spotlight on brands Starting in the 1980s, Kraft began telling separate stories for each of its brands in 30-second spots. Some of Kraft's memorable campaigns included the Parkay margarine talking container (Needham, Harper & Steers); "Annie," the young spokeswoman for Kraft Macaroni & Cheese Dinner (Foote, Cone & Belding); and the 10-year series of commercials for Miracle Whip Salad Dressing (JWT), featuring consumers lamenting that they had run out of the product. One of the longest-running campaigns for a Kraft brand featured Bill Cosby. He became the spokesman for General Foods' Jell-O brand puddings and gelatins in 1974, long before General Foods and Kraft were merged in 1989, and the campaign via Young & Rubicam continued after the merger. In 1992, Kraft returned to network TV sponsorship after a five-year hiatus. "The Secret," starring Kirk Douglas, debuted as the first "Kraft Premier Movie." "Premier Movie" provided a showcase environment for Kraft brand advertising and was broadcast each year except 1996. Also in 1992, Kraft became one of the major sponsors of the Essence Awards, presented annually to African-Americans of note by Essence. Kraft's advertising efforts were not confined to network TV. Cable TV provided additional opportunities to reach consumers, and Kraft entered the cable arena in 1980. It was a charter advertiser on CBS Cable, a fine arts channel, where it reran episodes of "Kraft Music Hall." In 1981, it sponsored the first cable miniseries, "Robert Louis Stevenson's Kidnapped," on WTBS, with commercials from JWT. In the 1990s, Kraft and its agencies continued to explore ways to maximize TV's potential. In 1994, Kraft determined that strategic alliances among brands would lead to synergies in advertising, marketing, sales and promotions, and the company accordingly created the Kids Marketing Task Force, which united 25 individual Kraft brands into the Kraft "Kids Brands." In March 1996, Kraft and cable network Nickelodeon formed an exclusive alliance for an integrated advertising, promotional and marketing campaign centered on the network's Nick in the Afternoon programming. A special 1996 back-to-school event linking the network's programming and the Kraft "Kids Brands" was the most successful children's promotion in the history of Kraft Foods to date. The success of the Kraft "Kids Brands" provided the model for an unprecedented initiative to tell consumers about Kraft products in an entirely new way. In August 1998, Kraft unveiled its Kraft Foods Equity campaign to consumers. Created by JWT, this campaign was Kraft's first integrated marketing program that consistently leveraged all the marketer's brands. KFE employed broad-based marketing strategies, including documentary-style print ads and TV spots featuring consumers and their families, charitable giving, toll-free numbers, consumer promotions, direct mail campaigns and Internet programming. In September 1996, Kraft launched the Kraft Interactive Kitchen Web site. The site addressed a wide range of meal preparation needs and included a cookbook featuring more than 600 recipes created by the Kraft Kitchens. Nabisco merger In December 2000, Kraft parent Philip Morris purchased Nabisco Holdings Corp., the company spun off from the former RJR food group, for $18.9 billion. The following June, Kraft went public with an IPO that raised $8.7 billion for Philip Morris, which changed its name to Altria Group in early 2002. As of 2001, Kraft's U.S. ad budget was $869 million, according to Advertising Age. Agencies for the Northfield, Ill.-based company included Leo Burnett USA, Chicago; Ogilvy & Mather Worldwide, New York; J. Walter Thompson USA, Chicago; Foote, Cone & Belding Worldwide, Chicago; Y&R Advertising, New York; Bravo Group, New York; Gupo Samba, Dallas; and Starcom MediaVest, Chicago. In 2002, Kraft went national with its own magazine, Food & Family, a glossy title featuring recipes, tips and advertising for its own brands as well as that of other marketers. In December 2003, Kraft named Roger Deromedi?former co-CEO with Betsy Holden?sole CEO and shortly thereafter named Ms. Holden to the post of president, global marketing and category development as part of a new corporate structure and "Sustainable Growth Plan." In spring 2004, Kraft launched a syndicated TV special under the "Food & Family Live!" banner.

Kraft Foods

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