KRAFT TO BOOST MARKETING; PLANS NEW-PRODUCT BLITZ: ECKERT DISCLOSES LAUNCH GOAL OF 100 PRODUCTS OVER NEXT 3 YEARS

By Published on .

Most Popular
Kraft Foods plans to use savings in overhead to pad its $800 million marketing budget. And that will fund the launch of 100 new products within the next three years.

President-CEO Robert Eckert told analysts last week Kraft believes the new lines will "account for about three-quarters of our incremental volume growth" and that they will be focused in four target areas: dinner kits, snacks, specialty international foods and functional foods.

Mr. Eckert didn't outline the amount of the marketing increase, but he said Kraft's total overhead expenses will decline as a percent of revenue and half of that savings will go toward increased spending.

TAKING ON SARA LEE

In the snack category, Kraft is poised to take on Sara Lee Corp.'s Cheesecake Bites and Cheesecake Singles with Philadelphia Snack Bars, a four-item line of individually wrapped, refrigerated, cheesecake-like bars going into the Northeast and Central U.S. J. Walter Thompson USA, Chicago, is the agency.

Packaging carries the line "A little taste of heaven."

Mr. Eckert said the company is also hoping to bring more of its international products to the U.S.

He cited Altoids, the mints expected to break $100 million in sales this year. Kraft is tinkering with putting more marketing support against other Callard & Bowser-Suchard products, such as Toblerone Chocolate Orange candy and La Vie de la Vosgienne mints.

DINNER KITS ENTRIES

Mr. Eckert didn't discuss plans for dinner kits, a category in which the company already participates with its licensed Taco Bell Home Originals and Stove Top Oven Classics, now rolling national.

But he did say a completely new salad dressing brand, called Taste of Life, is coming this fall to compete in functional foods, which Mr. Eckert described as products that provide "positive health or energy benefits."

"While the concept is still in the early stages of development, we believe Kraft's marketing and R&D skills, and broad portfolio, will enable us to take full advantage of this promising opportunity," he said.

Made of what Kraft says are "heart-healthy oils," the dressings are assigned to Leo Burnett USA, Chicago.

The dressings come in four varieties, and are made of the highest monosaturated oils.

They come as competitors Lipton and McNeil Consumer Products Corp. are readying salad-dressing extensions to their cholesterol-reducing margarines, Take Control and Benecol, respectively.

LOOKING AT LICENSED PRODUCTS

Heartened by its success with licensed products, including Post Oreo-O's cereal, California Pizza Kitchen frozen pizza and Starbucks coffees, Kraft is looking to sign up more such ventures that Mr. Eckert didn't identify.

Kraft's strategy "is to strengthen our portfolio, which we hope to do through our ongoing licensing and trademark licensing program," he said.

Starbucks, for example, will be a $100 million to $200 million supermarket business by 2001, he said, and the line is now expanding to Wisconsin, Florida and the Northeast.

BOOSTING 'UNDERLYING' VOLUME

Kraft's goal is to heighten operating income results and boost "underlying" volume beyond what Mr. Eckert said is a 3.3% increase per year from 1993-98.

Coaxing additional growth out of the business may be tough, considering that behemoth Kraft already has four brands with more than $1 billion in sales (Kraft, Maxwell House, Oscar Mayer and Post) and 27 brands that currently ring

In this article: