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Kraft Case Study

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Starting with our key external opportunities, U.S sales of organic foods and beverages have increased from $1 billion in 1990 to $26.7 billion in 2009. This key external factor was given a weight of 0.08 to show that this is an important factor that the food processing industry can potentially take advantage of because organic food is a rapidly growing trend with areas to be capitalized. We rated this external factor a 3 because Kraft has developed organic product lines that target a more health conscious consumer group. However we feel that their response wasn't superior because there are many more products within all of their business segments that have the potential to be redesigned to fit the organic label. Another key external factor is …show more content…

There is a huge market for bottled water which Kraft saw an opportunity in when they designed their new innovative bottle water flavor enhancer MiO. We weighted and rated this opportunity 0.13 and 4, respectively. Another important external factor is the growing environmental awareness in the U.S and Europe. We weighted this factor a 0.06 because we feel that for food processing companies to go green they would have to allocate many resources in developing new ways to reduce waste. These changes would be expensive and long running so companies would find them overvalued and not profitable. We rated this 3 because Kraft has reduced the waste in 6 out 9 of their major manufacturing plants in the U.S. by 80% with plans to reduce waste disposal to zero by 2015. Our final key external factor under opportunities was the increased demand for packaged and processed foods around the world as a result of a change in lifestyles. These days it is more common to have double income families who are bound to have less time to cook and having extra cash for quicker meals. We felt that this was a fairly important success factor for the food processing industry because of the high demand for convenience food. We rated Kraft’s response to this as above average because they focus on developing quick meals that …show more content…

We weighted this threat low because most of the products within the food processing industry are labeled “junk” food and cannot be the primary source of nutrition for kids and adults. We rated this factor a 2 because even though Kraft has developed healthy choice product lines, many of their best selling products still contain high levels of saturated fat, sodium and sugar. Kraft has responded to this by not advertising to children under 6, only promoting their Better-For-You products for children between the ages of 6-11 and absolutely no school advertising. Another key threat we observed was a workforce reduction in the food processing industry of 7.5% in 2009. This was due to a weak economy and increase competition which is affecting most companies within the industry evenly which is why we weighted this factor 0.04. Prior to 2008 companies where experiencing the peaks of a booming economy resulting in a bloated work force. These peaks were quickly diminished when the recession took effect resulting in many companies reducing their work force in order to remain operational. We rated this factor 1 because Kraft reduced its work force by 19,000 employees in 2009, which is way above the industry average. Petroleum is used for many operations within the food processing industry, from agricultural costs, to shipping and

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In David Freedman’s essay How Junk food Can End Obesity, Freedman makes the claim to policy arguing that instead of demonizing processed foods, Americans should instead support the idea and production of healthier processed and junk foods. He calls on the public to recognize that while many products on the market these days are labeled as “wholesome” and “healthy”, consumers should learn to become aware of the fat and calorie content in these products because many times they have the same- if not more- fat and calorie contents as that of a typical Big Mac or Whopper. In his essay, Freedman primarily places blame on the media and the wholesome food movement for the condemnation of the fast and processed food industries saying, “An enormous amount of media space has been dedicated to promoting the notion that all processed food, and only processed food, us making us sickly and overweight” (Freedman), he further expresses that this portrayal of the

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In addition, one can predict that organic food has a gradual increase in advertisements in social media

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“Are you really putting in what’s right for your body?” “Ingesting pesticides can inhibit brain development.” “Only organic foods can keep you safe.” Catch cries such as these seem to plague the media. However, consumers do not need to constantly worry about eating a strictly organic diet.

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“Many food suppliers utilize processed foods as well as artificial flavors and coloring, preservatives, emulsifiers, and other food additives, which are currently allowed in cafeteria meals.” School lunches provide a ton of non nutritious ingredients that have a negative impact on a kid's health. We need better food so that kids don’t start their early years eating bad foods that won’t help them in the future. School’s are feeding kids food with a ton of preservatives that are not helping their bodies at all. Upgrades should be made to save kids/teens health.

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Consumer tastes and preferences are major determinants of demand in the food processing industry, in particular the rising trend of health concerns by consumers. Generally, Canadians are interested in leading healthier lives, and so demand for natural, wholesome and healthy food products is rapidly growing. Food and beverage products that target specific health concerns, such as gluten-free or low-fat products, as well as those with a higher nutritional value tend to have significantly higher demand (Government of Canada, 2010). Across Canada and all of North America, there is a trend toward eating locally,as well as eating an increasingly meatless diet. There is also an expressed interest in natural products, which are perceived to be healthier.

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The food industry is expected to grow rapidly in the future due to improving lifestyle and rapid urbanization (“Global Fast Food Market”, 2017). With this potential demand created, KHC can easily capitalize the growing foodservice industry and tailor their products to the specific demographic (Bhasin, 2018). Another strong resource KHC can utilize is focusing on nutritious products. As the foodservice industry continues to grow, KHC should further explore on expanding its product portfolio to include healthier options. Natural and organic brands, as well, as small labels buying from local farms, have become an essential part of the consumer lifestyle (Tarkan, 2015).

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While researching information on this project, the information I found included many things the fast food industry keeps from us that we often do even think about. For example, a food product can be labeled as “sugar free” but can be substituted with other things such as, agave which is often worse due to its high concentration in fructose syrup. Another example would be that, Gerber uses fruit pictures to claim its Gerber’s are made from real fruit when in reality they are filled with corn syrup, syrup and grape juice concentrate. These are known as “calorie distracters” and work really well on people who refuse to give up eating fast food. Whether they know that fast and processed foods are unhealthy or not, they are satisfied by knowing that a label says “sugar free” and therefore it is okay for them to consume it.

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