Kraft Foods Case Analysis

Topics: Coffee preparation, Coffee, Costs Pages: 4 (1160 words) Published: March 11, 2013
Kraft Foods: Coffee Pod Launch

Case Analysis

Case Objective:
Kraft Foods will need to decide whether or not to launch coffee pods in Canada or to not launch will need to be decided based on the information gathered. Company Background:
With 50 $100 million brands, Kraft Foods is the largest food and beverage company in North America. Kraft’s product manager for coffee development has less than one month to decide if Kraft should launch coffee pods, which is a one cup brewing system, in Canada. The coffee pods are launching in the USA, so the decision to launch in Canada as well must be considered along with what the MSRP will be, which flavors to launch, and distribution. Kraft Foods is the world’s leader in coffee sales with 15% of the global market. Kraft’s Maxwell house line is Canada’s top retail brand of roast and ground coffee. The Product:

The single-serve coffee pod (SSP) machine is a major innovation for the coffee market. It was originally produced in Italy. By 2003 Kraft Foods had created a home version of the SSP and marketed the coffee pods in 10 European countries. The biggest competitor for Kraft in the coffee pod market is Senseo who have sold 5 million coffee makers in their first 3 years. SSP machines use pre-packaged single servings to make coffee in less than a minute by forcing hot water through the pod at high pressure. Each pod contains between 7-10 grams of coffee and can only be used in the machine created specifically for the pod. Some obvious advantages of using the SSP are: it takes less than a minute to brew a cup of coffee, there are several flavors to choose from, and you can make different flavors without contamination from the previous cup. Also, there is just a pod to toss out and never a mess with grounds to dispose of. A disadvantage of the SSP is that it is a bit more costly than traditional drip coffee – SSP machines (.20 - .50 per cup) drip coffee machines (.05 - .15 per cup). Canadians vs. American Coffee...
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