Several factors combine to affect the performance of Kraft as well as the industry as a
whole. These include rising input and commodity costs, increasing market share of
private label products domestically and abroad, declining at-home consumption of food products, and changing dietary trends toward healthier foods. As a result of these
factors, Kraft’s margins have suffered in recent years, and its stock price has failed to
significantly outperform the S&P 500. In order to counter these trends, Kraft has
instituted two restructuring programs aimed at divesting non-core products, realigning
their product portfolio, increasing efficiencies, and cutting costs. The restructuring
programs will result in the closure of nearly 20 factories and a reduction in workforce
by nearly 6,000. Kraft hopes to receive $800 million per year in cost savings from these
programs. These programs were already under way at the time of this report.