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