Kraft Foods Competition
Now Viewing Kraft Foods's competition in: Bakeries
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How large a geographic area does the baker serve? - Large bakery facilities can serve a 300-mile radius.
What industries does the baker sell to? - Supermarkets are the largest customer in most markets, but convenience stores, restaurants, fast food outlets, schools, and other institutions can be big customers.
Who are the company's major competitors? - As supermarkets consolidate and compete fiercely, they pressure baked goods manufacturers. Large supermarkets can leverage better deals, more promotional money, and lower inventories.
How does the baker find new customers? Does it have its own sales force or sales representatives? -
Does the company promote par-baked products? - Par-baking includes baking a product until it's about 90 percent cooked and then immediately flash-freezing it. By buying frozen par-baked products from bakeries, grocery stores and restaurants don't have to hire highly skilled bakers or worry about products spoiling quickly.
Competitive Landscape
Demand is related to eating trends and to the changing structure of the grocery industry. Profitability for individual companies is determined by efficiency of operations. Large companies have scale advantages in procurement, production, and distribution. Small companies can compete by offering specialty goods or superior local distribution services. Despite high automation, the low value of the product produces a fairly modest $150,000 in annual revenue per employee for commercial bakers.
Business Challenges
CRITICAL ISSUES
Raw Material, Energy Costs Volatile - The costs of major raw materials, such as wheat, vegetable oils, fuel for delivery fleets, and natural gas for ovens, can change rapidly. Futures prices for wheat and vegetable oil can vary more than 50 percent during a year; natural gas futures by more than 100 percent. To protect against sharp increases in raw material costs, many bakers use futures contracts.
Competition from Customers - Consolidation in the supermarket industry has produced large chains that can efficiently operate their own bakeries. Publix operates a central bakery to supply its stores in the Southeast. Grocery-owned bakeries typically supply "fresh-baked" goods, while longer-shelf-life products are bought from commercial bakers.
Industries Where Kraft Foods Competes
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Food(primary)
- Candy & Confections
- Canned & Frozen Foods
- Beverages
- Consumer Products Manufacturers
- Appliances
