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Kraft Foods plans to split into 2 companies
SARAH SKIDMORE
(The Associated Press)




05:22:32PM (DST) Thursday,August 4,2011.

PORTLAND, Ore. (AP) — Kraft Foods Inc. said Thursday it plans to split into two publicly traded companies, with one focusing on its international snack brands like Trident gum and Cadbury chocolates and the other on its North American grocery business that includes Maxwell House coffee and Oscar Mayer meats.

Kraft is the latest in a string of U.S. companies including rival Sara Lee Corp. to separate its business to cater to different niche markets. As companies increasingly look for ways to drive growth during a difficult economic environment, there's been a major shift from thinking bigger is always better to sharpening their strategy on smaller businesses that focus on a group of brands.

"In general, it mirrors what we have seen from other consumer brands," said Morningstar analyst Erin Lash. "In terms of what it means for the industry, we have seen some businesses over the past several years, particularly food companies, become more focused brands."

The move surprised industry watchers because Kraft, the nation's largest food maker, had long touted its scale and reach as its strength. Kraft officials said Thursday that after several years of acquisitions, sales and other changes, it became clear that the company had built two "strong, but distinct, portfolios" and the next step is to recognize the separate priorities for each.

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Big business stragedy on the part of Kraft in rivaling Sara Lee.

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