US: Kraft Foods posts beverage profits leap
- Q1 operating profits jump by 27.6% to US$125m
- Profits driven by lower manufacturing costs
- Kool Aid, Capri-Sun “deliver strong volume/mix”
Kraft Foods posted its Q1 results today
Kraft Foods' beverage unit has posted a healthy lift in operating profits as overheads fell and productivity increased.
The division's operating profits in the three months to the end of March climbed by 27.6% to US$125m, the US company said yesterday (2 May). Overall, Kraft Foods, which also produces cheese, refrigerated meals and groceries, saw net sales climb in the quarter by 2.1% to $4.55bn and operating profits increase by 9.2% to $809m.
“We’re off to a solid start,” Kraft CEO Tony Vernon said. “Our first-quarter results reflect strong returns on our new product innovations to date, as well as the fact that our cost savings outpaced our plans to reinvest in our brands.”
Kraft said its strong beverage performance was down to improved volume/mix and lower manufacturing costs. It said it had reduced overheads and increased productivity, however commodity costs increased.
Kool-Aid and Capri Sun “delivered strong volume/mix in the quarter”, Kraft said.
In Kraft's international & food service unit, its MiO liquid water enhancers, launched March 2011, posted “strong” sales growth, the company said.
Looking ahead, Kraft CFO Tim McLevish said the company is “on track to deliver every element of our 2013 financial guidance”.
Kraft's share price dropped by 1% yesterday to $50.53.
To read the company's official statement, click here.
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