Kraft Foods Group (UNKNOWN:KRFT.DL) is entering a new era after its recent corporate breakup. Its brand power is indisputable, and its market share dominates. But Kraft's growth potential is limited, and its heavily commoditized categories face massive pressures. I've created a premium report on Kraft to help investors examine the company's future.
Below is an excerpt from the report, which highlights an overview of the company. It's just a sample of one section, but we hope you find it useful.
Kraft Foods Group is a $19 billion North American food and beverage company whose leading brand portfolio includes Kraft, Oscar Mayer, Philadelphia, Planters, and many others. Kraft was formed in the October 2012 breakup of Kraft Foods, when it was spun off from the parent company, which then changed its name to Mondelez International. Mondelez retained the parent company's global snack-food brands of cookies, crackers, chocolates, gums, and candies.
Out of 100 North American households, 98 possess Kraft brands in their refrigerators and pantries. With roughly 80% of Kraft's revenue coming from categories in which the company holds the No. 1 or No. 2 market position, Kraft is considered a dominant market share leader. But with Kraft confined to mature North American markets, this limiting factor may severely hinder the company's long-term growth potential.
Fortunately for Kraft, U.S. convenience-food consumption is increasing, aided by demographic and lifestyle trends toward faster, but also healthier, meal alternatives. This movement is driving Kraft and its competitors to reformulate existing products and launch new, healthier ones. In this space, first-to-market status is critically important.
Kraft's brand dominance lends it a significant competitive advantage. On average, Kraft boasts roughly twice the market share of its nearest branded competitor. Its largest branded competitors in the North American food and beverage space include PepsiCo, Nestle,Coca-Cola, General Mills, ConAgra, and Kellogg. Kraft Foods Group aims to compete by "turbocharging" its iconic "Power Brands" in North American markets. Organic net revenue for Kraft Foods North American division (now Kraft Foods Group) grew 4.8% in 2011.
The company boasts 10 brands that each generated more than $500 million in sales last year, including household names Kraft, Maxwell House, Philadelphia, Planters, Lunchables, Capri Sun, Jell-O, Velveeta, and Oscar Mayer. Of these iconic brands, all except Lunchables, Capri Sun, and Velveeta have existed for over a century apiece. Another 17 brands boasted sales in excess of $100 million in 2011.
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That was just a small morsel of our new premium report on Kraft Foods Group. If you're trying to figure out whether the company is a buy or sell, the report is an indispensible resource for investors seeking more information. Also, the report comes with updated quarterly guidance so you'll stay in the know. To get started, simply click here.
Fool contributor Nicole Seghetti owns shares of General Mills and PepsiCo. The Motley Fool owns shares of PepsiCo. Motley Fool newsletter services recommend The Coca-Cola Company and PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.