* Planters NUTrition peanut butter to roll out in July
* Kraft companies to keep emphasis on new products after
* Companies to cross-license technologies after split
By Martinne Geller
June 1 Kraft Foods Inc is introducing a
new line of Planters peanut butters with ingredients like dried
fruit and granola mixed in, hoping to appeal to adults with a
taste for the popular kids' food.
The launch of NUTrition peanut butters -- as in berry nut,
banana granola nut and cinnamon raisin granola nut -- comes as
Kraft is preparing to spin off its North American grocery
business by the end of 2012.
While the team of scientists behind this product will all go
work at the spun-off company, Kraft's research and development
team is working hard now to make sure that all that they
learned on that project, and others, can be used by the
scientists that stay behind.
Their lessons include how to make sure stir-ins are
distributed evenly and the fact that consumers don't like the
taste of peanut butter and orange together.
Once Kraft Foods Group is spun off, the remaining company
will be renamed Mondelez International and will sell snack foods
like Cadbury chocolates, Oreo cookies and Trident gum, mostly
"We want to create two powerhouse companies. We're trying to
make sure we replicate the knowledge that we have right now for
two companies instead of just the one," said Jean Spence,
Kraft's executive vice president of research, development and
A benefit of being a $54 billion company with dozens of
brands is that Kraft's different units were able to borrow
technology from each other. For example, when Kraft launched
Jet-Puffed Mallow Bits, it used the same packaging as Kraft
Grated Parmesan cheese.
Spence will stay at Mondelez (pronounced mohn-dah-LEEZ),
but her current team will be splitting in two, and as such, the
people are busy documenting what they know for their
counterparts that will go to the other company.
"The real focus in R&D has been making sure we understand
who owns the IP (intellectual property), but we're giving the
other company the royalty-free license to that IP," Spence said.
LINE EXTENSIONS VERSUS LOCAL TWEAKS
Kraft said in December that it was introducing more than 70
new products, including Velveeta Cheesy Skillets dinner kits,
Philadelphia Indulgence Spreads made with cream cheese and
chocolate, and Kraft MilkBite granola bars.
Like most food and beverage companies, Kraft has been
raising prices on many of its products to offset higher
commodity costs. But consumers, constrained by a weak economy,
often balk at paying more for products they already know. Yet
they will often shell out for something new.
NUTrition peanut butters should cost about $3.99 for a
12-ounce jar, making them 43 percent more expensive per ounce
than regular Planters peanut butter, which costs $3.69 for 16.3
Last year, about 10 percent of Kraft's revenue came from
products that are less than three years old, up from 8 percent
in 2009. The company has also increased its spending on research
and development over the same period at a rate greater than
Company executives say the split will not hinder the
development of new products in the future, though they say that
the types of innovation may be different.
"On the snack side, they'll be looking for ideas that have a
global element ... that travel," said Barry Calpino, Kraft's
vice president of breakthrough innovation. "That's a very
different innovation challenge" from what the North American
company will have to do.
For example, Mondelez will be selling chocolate in countries
that have very hot weather and limited refrigeration. As such,
it is working to develop chocolate that is more heat-resistant.
To appeal to local palates, the company has also been developing
different flavors for its Oreo cookies and Ritz crackers.
At the spun-off Kraft Foods Group, ideas will just have to
appeal to consumers in North America, who are already very
familiar with the company's brands, which include Planters,
Oscar Mayer, Kraft and Maxwell House. Because of the high brand
awareness, line extensions are common.
Even though Planters has been selling snack nuts since 1906,
it didn't launch a peanut butter until last year. But once the
brand launched the original Planters peanut butter, the newer
ideas came quickly, said Triona Schmelter, senior director of
marketing for Kraft Foods.
Schmelter said the new flavors and textures are meant to
appeal to adults, who account for two-thirds of peanut butter's
consumption but are surprisingly not targeted by marketers.