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Kraft CEO Says Private Label Has Peaked, Kraft is Fighting Back

August 16, 2010
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Private label has hit its high point and could be in decline in some categories, contends Irene Rosenfeld, Kraft Foods chairman and CEO

 

“Without a doubt private label share has stabilized,” she tells analysts in an Aug. 6 quarterly earnings call. “That's been true over the last couple of quarters, and in fact in some cases we're seeing it begin to decline. So I don't expect a dramatic change there and I think, again, the investments that we are making in our brand franchises, in our brand equities as well as in our innovation pipeline, are, we believe, the way to set ourselves apart over the long term. And so I think we're going to be well positioned to be able to address our market position in the future as a consequence of that investment.”

 

Vincent Andrews, a Morgan Stanley retail industry analyst, asked,  “So your view would be that private label share gains have decelerated, but this doesn't have to do with branded promotional spending going up, is that correct?”
 
“I would say that's correct because we basically saw that private label share seems to have a water level, we actually saw it reach that water level a couple of quarters ago, and we haven't seen really much change since that time,” Rosenfeld says. “But again, our approach to dealing with private label, as well as any of our competitors in any of our categories, is to continue to differentiate our brands by investing in equity and investing in the innovation pipeline. And so far, that seems to be serving us well in most markets around the world.”
 

To see the complete transcript of the conference call, go to www.seekingalpha.com

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