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Cadbury acquisition drives Kraft’s Q2 net revenue

BY Allison Cerra

NORTHFIELD, Ill. Kraft Foods experienced an increase in its net revenue, thanks to its acquisition of Cadbury earlier this year and solid growth among key brands.

Net revenue in the second quarter increased 25.3% to $12.3 billion for the overall corporation, including a favorable impact of 22.8 percentage points from the Cadbury acquisition, 0.8 percentage points from currency and a negative 0.3 percentage point impact from divestitures. Operating income increased 16.8% to $1.7 million.

Meanwhile, Kraft said net revenue for its North America division increased by 6.3%, including a 6.9 percentage point impact from the Cadbury acquisition and a favorable 1.6 percentage point impact from currency, although base business performance was affected by a two percentage point decline in volume/mix and essentially flat price levels.

But while certain factors offset the benefits of investments in marketing and innovation — which drove solid growth in base consumption in key brands, including Capri Sun, Ritz crackers and Oreo cookies, among others — Cadbury growth reflected strong gains from successful new product launches of Trident Layers, Stride Shift and Dentyne Pure gum, Kraft said.

“We delivered strong earnings in the quarter and the first half of the year, despite difficult conditions in many markets that tempered top-line growth,” said Irene Rosenfeld, chairman and CEO. “We’re making excellent progress on the Cadbury integration and expect to realize even greater synergies. In light of our strong earnings momentum, we will reinvest our 2010 upside to build our brands and to harmonize business practices. We will deliver at least $2 of operating EPS this year while building a stronger foundation to achieve top-tier growth in 2011.”

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P&G launches Give Health Clean Water Blogivation

BY Allison Cerra

CINCINNATI Procter & Gamble is launching a new social media campaign that promotes safe drinking water for children.

In partnership with Changents.com and P&G’s Children’s Safe Drinking Water program, the Give Health Clean Water Blogivation will showcase the power of female bloggers to improve the lives of people in need of clean drinking water, P&G said. The campaign uses the power of digital storytelling to link online consumer actions with offline community impacts, the company said.

“P&G is committed to touching and improving lives of people around the globe, and providing clean drinking water to as many people as possible. I’m proud that we can build on the success of P&G’s Children’s Safe Drinking Water program to connect real women who care about water issues with the tools and resources they need to become change agents for clean water,” said Greg Allgood, director of P&G’s Children’s Safe Drinking Water Program. “Through the stories of our real world partners, like Alie Eleveld of the Safe Water Aids Project (SWAP) in Kenya, we hope to inspire and enable other women to share their stories and improve lives.”

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Private-label purchases will forge ahead as economy changes, study finds

BY Allison Cerra

NEW YORK Private-label purchases and loyalty likely will continue, according to a study conducted on behalf of the Private Label Manufacturers Association.

According to PLMA’s latest nationwide poll of main household grocery shoppers, “Store Brands & The Economy: Are Shoppers Ready to Start Spending Again?” — conducted by GfK Custom Research North America — found that 63% of shoppers have changed their food buying habits as a result of economic conditions. Of these shoppers, fully two-thirds report that they are purchasing private label products in categories where they used to buy only national brand items. What’s more, 8-of-10 respondents said they will be buying more store-brand products in categories where they previously only purchased the national brand product once the economy returns to normal.

While 1-of-every-5 shoppers believe the economy is improving, the importance of a food’s nutritional value remains high. Nearly two-thirds (65%) of those surveyed are satisfied that product labeling for both store brands and national brands provide them with sufficient information to make decisions about which food products to buy.

Click here to download the full report.

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