Kraft Foods to split grocery division into two business units

US-based food major Kraft Foods Group is set to split its grocery segment into two standalone business units, meals and desserts and enhancers and snack nuts, as part of its efforts to create more focused, less complex businesses.

Kraft Foods noted that the creation of the new business units will enable it to focus on brand-building while reducing the complexity of managing a portfolio with distinct brands and product categories.

The categories and brands that have natural synergies such as Cool Whip and Jell-O will remain together, while the Planters brand will see the snack nuts and peanut butter categories under one structure.

The meals and desserts unit will feature Cool Whip whipped topping, Jet-Puffed marshmallows, Jello-O dry packaged and ready-to-eat desserts, Kraft Mac & Cheese dinner, Shake ‘N Bake coatings, Stove Top stuffing mix and Velveeta dinners and meal kits.

The enhancers and snack nuts division will feature A1 steak sauce, Grey Poupon premium mustards, Kraft and Bulls-Eye barbecue sauces, Kraft and Good Seasons dressings, Kraft and Miracle Whip spoonable dressings and Planters nuts, trail mixes and peanut butters.

Kraft Foods chief executive officer Tony Vernon said that since sprinning off Mondelez International from Kraft in October, the company has focused on strengthening its brands and has made a lot of progress.

"With the creation of our two newest business units and great leaders in place, we’re taking an important step to strengthen our focus on some of the most beloved brands in North America," Vernon said.

Michael Osanloo, who currently manages Kraft’s grocery unit, will lead the meals and desserts unit, while Oscar Mayer marketing senior vice president Jane Hilk will lead the enhancers and snack nuts unit, with both leaders reporting to Tony Vernon.

The new business structures and leadership appointments will be effective from 1 July.

The company will begin reporting the financial results of these business units as separate segments at the end of third quarter of 2013.

With the creation of the two new divisions, Kraft will have six business units in total: beverages; international and foodservice; cheese; refrigerated meals; meals and desserts and enhancers and snack nuts.

Kraft Foods is one of the leading consumer packaged food and beverage companies in North America with annual revenues of more than $18bn, and employs 23,000 people in the US and Canada.

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Image: Kraft Foods stated that the new business structures and leadership appointments will be effective 1 July. Photo: Courtesy of Kraft Foods Group.