CAGNY priorities play out in Kraft decision
At the 2011 annual conference of the Consumer Analyst Group of New York earlier this year, investing in international markets stood out as the most powerful undercurrent connecting the presentations of leading consumer packaged foods companies.
Trying to gain “street cred” with the investment analysts, one chief executive officer after another went to great lengths to emphasize their market positions outside the United States and the thoughtful investments they were making to broaden their presence globally. This posturing was understandable given the many cases in recent years in which global food companies have experienced rapid growth in international operations while domestic businesses have lagged.
The increasing divide between the U.S. and non-U.S. food business came crashing to the fore last week with the announcement that Kraft Foods Inc. would separate its North American and global snack businesses into separate publicly traded companies. The announcement was yet another reminder that, for the most part, U.S.-based baking companies have watched this globalization trend as observers rather than participants.
Clearly, leading non-U.S. baking companies have not hesitated to become international companies. Exploring baking opportunities for growth outside the U.S. could well offer salve for what is likely to remain a challenging market environment in the United States.