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Kraft Foods to Split into Two Companies

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If you’re noticing a growing trend with certain chains such as Walmart and now SuperTarget, currently under construction in their attempt to create the ideal consumer one-stop shopping experience, then you’re not alone.

Kraft Foods Inc. announced Thursday its plans to split into two trade companies – one concentrating on global snacks like Oreo cookies and Trident gum and the other on North American grocery business, which includes Kraft cheese and Maxwell House coffee.  This bold move made by Chief Executive Irene Rosenfeld is the second made in the last two years, since Kraft acquired Cadbury PLC last year to become one of the largest food companies in the world, second only to Nestle.

According to the Huffington Post, the strategic move was sparked by companies like Wal-Mart Stores Inc., Target Corp, and various dollar chains maneuver to “capitalize on consumers’ one-stop shopping needs” through expansion of their grocery sections.

“Our strategic actions have put us in a position to create two great companies, each with the leadership, resources and strong market positions to realize their full potential,” Chairman and CEO Irene Rosenfeld said in a statement.

History shows the food manufacturer’s maneuver to keep up with the changing times is not it’s first.

The NY Times reports the trend started when Kraft was acquired by cigarette maker Philip Morris in 1988.  The $13 billion deal was Phillip Morris’ attempt to diversify outside of tobacco, an industry plagued by legal battles and health concerns.

Soon Miller Genuine Draft beer and Maxwell House coffee were included into the parent company’s portfolio.

Kraft was later combined with General Foods in 1989 and acquired Jacobs Suchard, which owned Toblerone and Milka chocolates in 1990, as well as Nabisco Holdings in 2000.

The following year, Phillip Morris sold 16 percent of the subsidiary, and in 2002 the company sold the Miller Brewing Company to South African Breweries, forming SABMiller.

Kraft began trading as a fully independent company in 2007, reports NY Times.  Since then, the company sold Post cereal in 2008 to Ralcorp Holdings, and picked up Cadbury, a European candy maker in February 2010.

The announced split is expected before the end of 2012.

Photo Courtesy of Hotcouponworld.com via Flickr

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