Kraft and Investor Relations

Kraft's Annual Report

Kraft's corporate website is a great resource for all investor relations related materials. This can be found in Kraft's investor center tab on the website.

Kraft's annual report appears to be more a marketing piece than anything else. In 2007, Kraft implemented a three-year growth plan with the goal of strengthening the company. The annual report primarily focuses on the growth strategy that Kraft has been implementing to strengthen their brand.

Where can I find Kraft's 10-K?

Kraft posted their 10-K form in their annual report. If you are interested in checking it out, it can be found on page 15 of the annual report. Kraft made it very easy for stockholders to navigate on the corporate website; Kraft posted all stockholder related information in one place on their website.

The goal of Kraft's annual report.

The goal of the company's annual report is to inform stockholders how well the company is doing, as well as what Kraft is doing to improve their brand image. The annual report is an opportunity for Kraft to update stockholders on all of the things that they have been doing throughout the fiscal year. The annual report is Kraft's chance to highlight their success, and to minimize the negative aspects by letting stockholders how they will improve things in the upcoming year.

Kraft's letter to shareholders..

In Kraft's letter to shareholders, Kraft's CEO, Irene Rosenfield, starts off by emphasizing how the company has been trying to become a "New Kraft." Here is my favorite tag-line from the piece: "we are turning the brands that customers have lived with for years, into brands they can't live without." I think this illustrates the passion that Kraft has. Even though they are an established company, Kraft realizes that it is their job to continually re-evaluate and revamp their products and services.

Rosenfield starts out her letter to shareholders in a very positive manner. She discusses a few points in Kraft's three-year growth plan in which she believes Kraft has been successful.

Here are some of Kraft's key messages..

• We said we were going to strengthen our senior leadership… and we did.
• We said we were going to invest in our brands.. and we did.
• We said we were going to improve our product quality... and we did.
  
• We said we were going to rebuild our product pipeline... and we did.
• And we said we were going to grow... and we did.
  

The rest of the letter talks about Kraft's progress in terms of revenue, some of the challenges that the company has faced, and four of Kraft's growth-plan's main strategies. The strategies that Rosenfield talks about are the rewiring of the organization for growth, re-framing their categories, exploiting their sales capabilities, and driving down costs without compromising quality.

How will this affect investors?

I believe the content of the letter gives investors hope and faith. Investors should be very excited with all of the upcoming changes that Kraft plans to execute. Rosenfield seems very positive with the objectives that Kraft will achieve in the upcoming year, and it makes investors and readers, like myself, feel confident in the company. Kraft's public relations practitioners are very intelligent in the sense that they admit that the company's results were not where they would have liked them to be. Kraft highlights their success along with their plans for the future, which creates confidence in investors, as opposed to doubt.

What is the tone of the piece?

Coincidentally, I always seem to be one step ahead of my homework questions. The letter is very informative. It informs investors on what kind of year the company had, as well as educates investors about the plans for the upcoming year.

Kraft's company earnings.

Kraft's latest news release about the company's earnings is from August 4, 2009, and talks about the earnings from their second quarter. The news release is not written in a reader-friendly manner. Unless you are familiar with business terms, it is somewhat difficult to understand. It includes a lot of statistics,as well as business jargon.

Here is an example of one of the statistics that you can find in the news release:

• Operating income margin increased 190 basis points year-over-year to 15.1 percent. Approximately 130 basis points of the improvement were attributable to lower costs due to the completion of the Restructuring Program, while approximately 50 basis points were attributable to favorable product mix.

CEO: Irene Rosenfeld

"The investments we've made over the past three years are driving solid business momentum in a challenging economic environment," said Irene Rosenfeld, Chairman and CEO. "We're on track to deliver strong top and bottom-line results, restore our profit margins to industry averages and consistently deliver against our long-term earnings growth target of 7 to 9 percent."

I think the quote from Rosenfeld is well written. She picked a few key points that she wanted to touch upon, and focuses on the positive aspects of each. I think the quote appears to be credible. Rosenfeld discusses the economy has become a challenge for the company, which is credible because it describes the current state that our economy is in.

C-o-n-f-i-d-e-n-c-e?

I believe that Rosenfeld's quote will create confidence in investors. Rosenfeld talks about some of Kraft's objectives for the next year such as restoring their profit margins and delivering against their long term earnings, which illustrates Kraft's confidence in their strategy.

How was bad news relayed?

Rosenfeld implies that the company has faced some challenges through her choice of key words such as "restore." The idea that Kraft has not been doing great business is subtly inferred, so that investors have the idea that Kraft didn't do as good as they may have hoped, but they don't dwell upon the negativity. Instead, Kraft highlights all of the positive things that hope to achieve in the future.

Changes? Suggestions? Feedback?

If I was in Kraft's position, I would suggest changing one thing. I would have changed the language of the news release. I think it should be more reader-friendly. The company needs to assume that not all of their investors are educated to the best of their ability, so my suggestion would be to write the new release on the level of a sixth grader.

Other than that, I think Rosenfeld's quote is beautifully written, and I can only hope that I could have written something as brilliant if I was in her position. Great job Kraft!

Relations with the community

How Kraft shows support.

It's sort of ironic that my assignment for this week is to write about community support, because I tied it into my previous blog, without even realizing it.

On the week of October 5th, Kraft put on a community relations program called "Make a Delicious Difference Week. It was the company's first global week-long period of community service. It ran from October 5th through October 10th. More than 10,000 employees in over 32 countries participated in the event. Over 150 different company sponsored projects took place worldwide over the wee-long community service effort.

Kraft's focus.

The focus of Kraft's "Make a Delicious Difference Week" campaign is to fight hunger, support healthy lifestyles, and build strong communities. Kraft partnered with organizations all over the country such as Feeding America and Save the Children.

Kraft's mission.

As the second largest food company in the world, Kraft decided that they needed to give back to their communities on a larger scale. Kraft's mission statement is to help people around the world eat and live better, and I believe that this program did just that.
Here are a couple of example that illustrates some of the projects that Kraft took on around the world:


• In Russia, 200 employees participated in outdoor activities, such as planting at a park, repairing and painting a playground, and cultivating school gardens.

• In Costa Rica, more than 75 employees cleaned floors, painted walls, shared meals and led games at a foster home for abandoned kids.


Since 1997, the company has provided more than 1 billion servings of fresh food. Kraft contributes approximately $100 million annually by donating food and money to community organizations around the world. The company has committed $180 million in the next three year to community involvement activities around the globe.


Was Kraft's public relations department successful?

I believe this event was very good in terms of public relations. Kraft is an organization that you don’t hear too much about in the news, so I’m glad that this event gained a lot of positive press coverage for Kraft.

I’m currently a fan of Kraft’s facebook page, and they’ve really started utilizing it recently. Kraft posted a youtube video the other day, so I decided to see what it was all about. The youtube video explains what Kraft’s “The Delicious Difference Week” is all about.

The goal of the video is to spread awareness on how important volunteering is. Each time the video is watched, Kraft will donate 5 meals to Feeding America through the end of October. Kraft’s original goal was 100,000 meals, but Kraft said that they have already accomplished that. As a result of all of the support, Kraft promises to double their donation if they reach 100,000 views by the end of October.

With all said, I think Kraft did an amazing job in terms of their public relations efforts.

What else could Kraft be doing?

The only suggestion that I have for Kraft is that they may want to consider doing a week-long community service based event twice a year. I think it would really benefit communities, as well as Kraft employees and management.

What kind of relationship do you have with the media?

"Make a Delicious Difference Week"

On October 5, 2009, Kraft will hold its first global week-long period of community service. The event is being called "Make a Delicious Difference Week," which will start on October 5th and will run through October 10th. The goal of the program is to fight hunger, support healthy lifestyles, and build strong communities. More than 10,000 employees in 32 countries will participate in the event.

"For years we've provided employees with opportunities to give back to their communities," Rosenfeld explained. "But, given the increased needs, we can all do more. We're doing our part by doubling our U.S. volunteer efforts and taking the spirit of the Serve America Act across U.S. borders to employees from France to Indonesia."- Chairman and CEO of Kraft Foods, Irene Rosenfeld.

Kraft is partnering with organizations all over the country, such as Feeding America and Save the Children.

Here are some examples of projects:

In Brazil, employees will promote healthy lifestyle habits to children at the Icaro Institute and child education centers.

In China, volunteers will educate children on nutrition in rural schools and orphanages.

Kraft believes in healthy lifestyles.

"As the second largest food company in the world, Kraft Foods is taking a stand when it comes to fighting hunger and promoting healthy lifestyles. Since 1997, the company has provided more than 1 billion servings of fresh food. The company contributes approximately $100 million annually to community organizations in more than 130 countries."

From a public relations standpoint..

I think Kraft's public relations practitioners are doing a very good job at planning and executing their community service-oriented event. Kraft is doing a great job with getting their employees involved on a global scale. It illustrates how Kraft cares about all of their communities.

One of the public relations aspects has been focused on informing the public how large-scale the event will be. Kraft employees will be performing various acts of community service on the same week around the world. Most companies perform acts of community service, but it usually is not done with all of the company employees on this type of scale.

Another public relations aspect of the campaign includes the organizations. Kraft has set up projects with some well-known non-profit organizations, that have causes that people can relate to. This can help promote Kraft with volunteers who are involved in these specific non-profit organizations who may not necessary know about Kraft.

It makes the public assume that Kraft employees must love their jobs. With the amount of employee participation, it portrays how likable the company's management must be.

Media


One of the ways that Kraft public relation practitioners are publicizing the event is through a press release. Kraft published the press release on their corporate website. When you go to their corporate website, there's a little summary of the event posted right on the main corporate page.

Another way that the event has been published is through online articles. I read a few of them on different websites, and for the most part, they were all set up the same, and contained all of the same information. It makes me think that either Kraft sent them their corporate press release, or journalists from other companies created an article using Kraft's press release as their base.

Was the company successful?

Yes, I think Kraft's media thus far has been successful. The event hasn't occurred yet, and I've already seen a handful of articles with details about the event. I am curious to see what kind of media the company will receive during the week-long event. I am sure the event will gain tons of media all over the world. I'll be on the lookout for press coverage as everything gets underway.

Performance.

I think the company did a good job with getting the event's details out on the internet, but I think it should have been publicized a lot more. If I hadn't been searching for topics to blog on, then I never would have known that Kraft was doing such a wonderful act of kindness.

I think Kraft did a great job at planning such a large-scale service concept because I've never heard of a company that has done anything like it. However, when it comes to promoting it, I think the Kraft could have used more social media outlets to promote the event.

Comments? Thoughts? Ideas?


I think Kraft could have done a number of things to promote the event beforehand. Kraft's "Make a Delicious Difference Week" has a great concept to it, and I think the public would have benefited from knowing earlier.

I think Kraft should have created a 15 second public service announcement on television. This could have showed the public how much their care about their customers and their communities. The scale of the event has the potential to create a lot of great word-of-mouth publicity about the company.

I think Kraft should have utilized their already-made Facebook page. They could have included events that employees were doing all over the world. They also could have used the Facebook page to encourage their target audience to partake in community service as well. They could have used a slogan like "if we could do it, then you could do."

Kraft also could have made a short video clip to post on YouTube. It could have explained the basics about the event. After I read the press release on the corporate website, I went to YouTube, hoping I was out of luck.