Kraft in Trouble

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Kraft in Trouble

By | Jan. 2011
Page 1 of 3
James L. Kraft, born in Ontario, Canada, started a cheese-delivery business in Chicago in 1903. Within a few years, Kraft was producing cheese as well as distributing it, and the company grew. During the 1920s, it began operations in Australia and Europe. In 1928, a merger with Phenix Cheese created Kraft-Phenix, a large food company that supplied about 40 percent of all the cheese consumed in the United States. In 1930, Kraft-Phenix became a subsidiary of the National Dairy Products Corp., which was founded in 1923 by the Chicago pharmacist Thomas H. McInnerney. By the early 1930s, when National Dairy's annual sales of nearly $400 million made it one of the largest companies in the United States, Kraft-Phenix employed about 700 people in the Chicago area. In 1969, Kraft and National Dairy became known as Kraft co; in 1976, when annual sales stood at about $5 billion, the name changed to Kraft Inc. By this time, the company employed nearly 50,000 people around the world, including about 3,000 in the Chicago area. Kraft merged with Dart Industries in 1980, creating Dart & Kraft Inc.; the two companies split in 1986. In 1988, when it was based in suburban Glenview, Kraft was purchased by Philip Morris, the tobacco and food giant. The following year, it was merged with General Foods, another Philip Morris acquisition, and renamed Kraft General Foods. The new company had a much larger product offering, which it expanded in the 1990s, when the company again took the name Kraft Foods, through the purchase of international corporations. In 2001 Philip Morris (renamed the Altria Group in 2003) sold a large portion of Kraft stock to the public but maintained a controlling interest in the company, now based in suburban Northfield. Their striving for top-tier financial performance and they have four strategies in place to get them there. It’s no coincidence the first strategy is about their people since their employees are the ones powering their success. They have a strong...