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The Honolulu Advertiser
Posted on: Tuesday, February 19, 2008

Kraft CEO expected to shake up firm's salad dressing business

By Mike Hughlett
Chicago Tribune

CHICAGO — When Irene Rosenfeld takes the stage today at a big food industry confab in Florida, the Kraft Foods chief executive is expected to unveil one of the company's biggest brand reinventions in years: A top-to-bottom shake-up of its flagging salad dressing business.

New packaging. Reformulated products to improve taste. And some new vinaigrette concoctions to boot.

It's the sort of effort that Kraft watchers like to see, but is also indicative of how far the giant food company has to go.

Rosenfeld is one year into a three-year-turnaround plan to improve Kraft's profitability and sales by pumping out more creative products and backing up those innovations with more marketing muscle. There have been some success stories, like Oreo Cakesters, a cake version of the fabled cookie, and Oscar Mayer Deli Creations, a microwaveable sandwich.

Still, several Kraft staples suffer from years of relative neglect, and salad dressing is a prime example.

Kraft is the nation's leading purveyor of salad dressing. But even as salads become a more popular meal item, Kraft's been losing market share and its dressing sales have been declining.

Kraft's pourable salad dressing sales last year were $372 million, down 20 percent from $467 million in 2002, according to Information Resources Inc., which tracks sales at supermarkets and other mass merchandisers, excluding Wal-Mart.

Part of Kraft's dressing dilemma is an industrywide problem: Nonrefrigerated salad dressing sales have fallen since 2003, albeit at a 7 percent rate, according to IRI. Yet bagged salad sales rose during the same period.

But salad dressing sales are not tied to salad sales, according to a report by market researcher Mintel International.

That's partly because some salad eaters may be using less dressing as they pile on other items like walnuts or cheese, according to Mintel.