The amalgamation of Kraft Foods and General Foods Company by Philip Morris in 1989 saw the establishment of the formation of Kraft General Foods (KFG). Kraft General Foods continued to expand with the introduction of new products to the market in 1990, including 7 fat-free products, which in actually fact was more then any other company had introduced at that time ().
Kraft General Foods continued to have total dominance in the food and beverage market, by acquiring companies all over the world. By 1991, KGF had acquired Capri Sun Inc, the manufacturers of the Capri Sun all-natural fruit drinks. In 1992 KGF acquired Csemege, Hungary’s leading confectionary company ().
KGF continued to acquire companies in the mid to late 1990s. 1995 saw the acquisition of two major confectionary companies, most notably the Ukraina Chocolate Factory. In 1996 KGF acquired the Taco Bell label of grocery products. Also in 1996 Kraft Foods established an interactive Internet site titled “Kraft Interactive Kitchen”, which is based on Kraft’s heritage traditions for providing wholesome food and healthy food ideas ().
AUSTRALIAN HISTORY
Kraft in Australia has had quite a moderate history. The Kraft name can be traced back as far as 1903, when Fred Walker & Company saw an innovative idea for the production of food, even before the formation of the Kraft Foods Company ().
During the mid 1990s the Kraft name in Australia continued to expand, with major investments in factories and new technology, and the move towards making Kraft the market dominator in the Australian dairy industry. Expansions continued in Australia to bring together a long and lasting relationship with Kraft and rural communities involved in the dairy market ().
Over the years the Kraft Company has contributed for millions of dollars into the Australian economy. One of the added benefits of Kraft is they sell their extensive range of products directly to the Australian retailers. Kraft also exports many products to many other countries in the world. This has ensured that all the processing costs remain within Australia ().
SOURCE OF THE PRODUCT
The Kraft label is an internationally recognised brand, seen throughout the world. Kraft’s head offices are strategically located in every major country throughout the world. Some of their major locations include New York, London and Melbourne ().
Kraft’s production and geographic region spreads all over Australia. The large majority of cheese purchased at supermarkets and grocery stores throughout Australia is produced from the 13,200 dairy farms located right across Australia. The following figures show a state-by-state comparison in the number of dairy farms:
- Vic 7,900
- NSW 1,800
- Qld 1,600
- SA 700
- WA 400
- Tas 750
()
In the year 1788, Captain Arthur Phillip and the First Fleet sailed to Australia, bringing with them a total of seven cows and two bulls. The following list of animals produce milk, which can be used in the manufacturing of cheese, these animals include:
- Cows
- Goats
- Sheep
- Water buffalo
- Horses
- Llamas
- Yaks
It should be clearly noted from Kraft Australia’s high quality products, that cows milk is only used in the production of cheese. In actual fact Kraft approximately uses 255 million litres of milk per year in the production of cheese. Kraft, the largest manufacturer of cheese within Australia, with plants in each state and they only use first class Australian raw materials in the production process. This clearly does show that Kraft is an innovative employer and a major exporter of products not only within the Asia Pacific region but to also the world ().
COMPOSITION OF THE PRODUCT
THE PROCESS OF MAKING CHEESE
The process of making cheese requires five basic steps for completion, these steps include: (1) Processing the milk; (2) Separating the curd; (3) Ripening; and (4) Packaging. Making any changes, whether is would be a major change or a slight change to the production process, the end result is the production of many different forms of cheese (). For further information regarding different forms of cheese, please refer to the Appendix section of the report.
-
Processing the milk and separating the curd- In the initial stage of the production of cheese, after the milk has been processed, it is then treated as soft custard like substance referred to as curd. Curd contains a liquid substance called whey, which has to be removed before the cheese has to be made. Manufacturers heat the milk to 30° to 36° C, this is to form the curd. Once this has been done, Starter Culture, a liquid substance is then added to the milk. This liquid contains bacteria, which then forms acids within the milk making it go sour. Mechanical paddles stir the starter culture at he beginning of the souring process, then dye is added evenly through the milk. The whey is then well drained, this is through the motion and heat force produced from the large mechanical paddles ()
-
Treating the curd- After most cheese is made, the curd is left on, after which the whey is drained off. From this, particles stick together, forming a solid mass around the milk. The curd is then broken into small minuet pieces for pressing. Metal hoops or moulds are used to press the curd. The containers are then put into presses, after which the cheese is placed under great pressure in the presses for several hours or for several days. During the pressing process, the whey is then drained, and the curd is then shaped in the formation of either a block or wheel. The cheese is then salted after pressing. However not all cheese is salted after pressing, take cheddar cheese for example, this form of cheese is salted before the pressing. The pressing stage is then complete, after which the cheese is removed from its mould. The formation of a crust referred to as the ring starts to form on the dry cheese. To prevent cheese from drying out too quickly, and thus stopping any form of ring forming around the cheese, the cheese is sealed in plastic wrapping after it is removed from the metal hoops ().
-
Ripening- This stage of the cheese making process is where the cheese is given its flavour. The longer the cheese is left to curd, the stronger the flavour. The use of temperature controlled storage rooms are used to age the cheese ().
-
Packaging- After the cheese has reached a certain age, it is then packed in a large variety of shapes and sizes, whether that would be sliced, sealed in foil or plastic or cut into large blocks, wedges or rounds ().
COMPARISON OF BRANDS
The following data was collected from Woolworths Bankstown on 19 March 2003
The pricing comparison includes:
The Kraft Cheddar cheese label is among the most recognised cheese labels ever seen, not only in Australia but also the world. With Kraft’s long established traditions associated with generations of pure craftsmanship, this label is considered to be of the highest quality ().
The Bega Cheese Company, constantly admired for consistency, in both texture and flavour, portrays the image of a wholesome country company. The quality of Bega’s products is evident in the many awards and prizes won at Royal Agricultural shows and the many gold medals and blue ribbons won in the Dairy Industry Association competition. The concluding factor that the Bega cheese label is more influential in customer choice then the other two comparison brands lies in the fact that this company is 100% Australian owned and made ().
The Dick Smith Foods Company is only in the establishment phase, having only been fully operational two years ago. Their main cheese product, “Aussie Tasty” is in actual fact prepared by the Bega Cheese Company. However, Bega Cheese has no formal financial interest in any of the products owned by Dick Smith Foods. Therefore with the quality of the Dick Smith Foods cheese label, the same high standards that consumers expect from Bega Cheese can be associated with Dick Smith Foods as well ().
STAGE IN THE PRODUCT LIFE CYCLE
Kraft cheese is the world’s leading cheese brand. It is therefore well evident that Kraft cheese is in the maturity phase of the product life cycle. The reason behind this is there are no longer many avenues Kraft can go down, as they have been able to corner every inch of the market for many years. In 2002, Kraft cheese made $4.5 billion in total revenue, which is approximately 18.5% of all total revenue from Kraft General Food products ().
Sales
Introduction Growth Maturity Decline
Time
During the Introductory phase of Kraft cheese in 1916, the entrepreneur James L. Kraft had the invention of pasteurisation and emulsification of cheese led to the supply of Kraft canned cheese to US Armed Forces. After the formation of the Kraft Walker Cheese Company in Australia in 1926, the associated costs that were hindering the placing and the promotion of the product were extremely high, and in 1927 sales rapidly increased, doubled from the previous year, this also exceeded export sales ().
Kraft cheese moved into the phase of increased Growth, due to promotion in the 20’s and early 30’s. The awareness of Kraft cheese by consumers was evident in its quick customer loyalty rate, establishing Kraft cheese as one of the innovative pioneering developments in the cheese making history. Increased distribution costs arose as a result of increased sales, which in turn increased profits as well
().
During Kraft’s Maturity Phase, its promotional costs fell, as did costs associated with the placement of the cheese, due to maintained inventories and the soaring profit margin. At this point in time, Kraft cheese established itself as a global leader in the production of cheese, establishing in such countries as Brazil, Spain and New Zealand, just to name a few. Profits both domestically and internationally reached their maximum level at this stage of the product lifecycle
().
During Kraft’s Decline stage, which was during the very early 1950’s, Kraft’s placement costs fell, resulting in the level of prices to fall; this was to clear stock levels. At this point in time, Kraft cheese was a recognised icon, known right around the world as the leading producer of quality cheese. It was also noted during both of the World Wars, Kraft provided rations of cheese to Australian Armed Forces in the battlefield ().
By examining Kraft’s position in the product lifecycle, from its establishment in the introductory phase to the Australian Market in the mid to late 1920’s, right through to its position today. It can be clearly noted that with over 100 years of existence, the Kraft label has proven itself against all odds and as a whole the company has gone from strength to strength, clearly establishing itself as the leading cheese manufactures the world has ever seen.
RELATIONSHIP TO ECOLOGY
Kraft does not focus on environmental issues as a whole; rather they would choose to educate their staff in particular on such aspects on the humane level such as education and community health and support. Kraft’s most notable gesture towards environmental support was in the form of the “provision of seed packages of basic grains to families in El Salvador for planting” ().
The Kraft Company provided some $30 million dollars worth of food and financial support in 2002 to many of the world’s non-profit organisations. Kraft emphasises by selling their products and educating their consumers, they are able to support those who are less needy ().
For the production of Kraft’s Cheddar cheese label, the following ingredients are used in the production process:
- Milk
- Salt
- Starter culture
- Enzymes
- Food acid
- Preservatives
- Natural colour
- Water
Cheese also does contain the semi solid substance referred to as “curd”, which forms when the milk in the production sours naturally or sours due to added substances. Cheese also contains casein, which in actual fact protects teeth from damage caused by sugary acids ().
When packaging for a large variety of food products, which Kraft does, they use lightweight, strong aluminium foil. As a result of aluminium foil being 100% recyclable, Kraft has been able to decrease their energy costs and thus benefiting the environment at the same time. Consumer awareness of the environment has contributed to Kraft’s environmentally friendly packaging methods, which consumers greatly appreciate. As a result of Kraft using aluminium foil and steel packaging, this provides a longer storage capability for their products, and they remain fresh for longer periods of time ().
Kraft in recent years has taken several steps to preserve the environment. They have taken steps in order to operate more efficiently in the running of dairy farms. Also Kraft have taken several measures in order to improve their packaging for their products, and thus improving the environment in which they operate in.
CONCLUSION
It can therefore be concluded from the above analysis of Kraft General Foods; they have been a pioneering giant in many of the world’s food brands for many generations. The company is the dominating factor in the cheese production market and will continue to be so due to their high quality products. Kraft will continue to produce and improve on old favourites as well as introduce new and innovative products to new and exciting markets. As Kraft themselves are one of the world’s leading food and beverage manufactures, their concern for the external environment is evident in their continued support for current world issues, rather then in environmental factors and issues effecting ecology. In comparison to their main rivals, Kraft products are more expensive, however consumers are more then willing to pay a higher price for their products, when they know Kraft cheese is only of the highest quality. Therefore, Kraft General Foods will continue to expand and grow into the future as the world’s premier food and beverage producer for generations to come.
REFERENCE LIST
Bega Cheese Company [online] 2003 Available from ; accessed 21 March 2003.
Dick Smith Foods [online] 2003 Available from ; accessed 21 March 2003.
Kraft General Foods [online] 2003 Available from ; accessed 21 March 2003.
Kraft Foods Australia [online] 2003 Available from ; accessed 21 March 2003.
Marshall, Robert T, S.v “Cheese”, World Book Online Americas Edition, Internet. Available from ; accessed 21 March 2003.
APPENDIX
APPENDIX 1: METHOD
Our research group initially planned to research the production and manufacturing of cotton. However, with the abandonment of information, we found it slightly hard to portray what information was useful and what information was not useful. After consultation with the group, we re-organised our thinking, and decided to investigate food products for our assignment. This lead to our first choice of topic, which was bread. We then went to such databases as Yahoo, Excite, Google and AltaVista to investigate our chosen topic.
However, this was just a suggestion to the future topic of our choice. Simply typing the word “bread”, the end result in the first initial search was approximately 300 plus possible websites. By limiting the search to only Australian websites we were able to narrow down more information that was useful for our chosen topic. The use of such databases was simply due to the fact that each group member had on previous occasions used these search engines for other research, and they found them to be useful for their purposes. The choice of Kraft General Foods for our primary research topic was simply chosen because one of the group members had previous experience before with this particular brand, as they had on that particular morning used a product of the chosen company for their breakfast consumption. Already having a general knowledge of the location of the Kraft website, we took a look in great detail of the availability of information that was required for the successful completion of the research purpose. After analysing this particular website, we concluded that the large majority of information found here was suitable for the assignment. For the comparison brands, we looked up there websites on such databases previously mentioned. The use of these databases helped in the idea stage of the assignment, however, it is the fact that the Kraft website was very informative and this did result in not using databases for the large majority of the research carried out.
APPENDIX 2: CHEESE FACTS
Cheese is healthful, tasty food made from milk. For thousands of years, cheese has been one of the most important foods of people throughout the world. Cheese can be eaten alone or it can be served on crackers, in sandwiches, in salads, and in cooked foods ().
There are hundreds of kinds of cheeses, and they differ in taste, texture, and appearance. Many cheese spread easily, but others are hard and crumbly. Some kinds of cheeses taste sweet, and others have a sharp or spicy taste to them ().
Cheese stays fresh longer than milk, and it has much of milk’s food value, including proteins, minerals, and vitamins. Cheese contains these nutrients of milk in concentrated form. For example, 8 ounces (227 grams) of Cheddar cheese provides as much protein and calcium as 1 ½ quarts (1.4 litres) of milk. Cheese, like milk, supplies important amounts of vitamin A and riboflavin ().
The United States leads the world in cheese production. Almost every state of the United States produces some form of cheese. Wisconsin ranks first among the states, and it accounts for about fourth of U.S. cheese production. Most cheese is produced from cow’s milk. People from Europe and Asia frequently make cheese from the milk of such animals as buffaloes, goats, and sheep. But cheese can be made from the milk of any animal. For example, Herders in Lapland use reindeer milk in making cheese. In Tibet, yaks supply milk for cheese. Cheese is also commonly made from the milk of camels, donkeys, horses, and zebras ().
APPENDIX 3: KINDS OF CHEESE
There are more then 400 kinds of cheese throughout the world. They have over 2,000 names because some cheeses are known by two or more names. For example, Swiss cheese is also called Emmentaler. Many cheese take their names from the country or region where they were first made. For example Swiss cheese originally came from Switzerland, and Roquefort cheese comes from Roquefort, France ().
Almost all cheeses belong to one of four main groups: (1) soft, (2) semisoft, (3) hard, and (4) very hard, or grating. The amount of moisture in the cheese does determine its classification. For example the more moisture the cheese contains, the softer the cheese is ().
Soft Cheese: The two most popular kinds of soft cheese include cottage cheese and cream cheese. Some soft cheese, including Brie and Camembert, develop a crust. The crust releases enzymes that soften the cheese and develop its flavour ().
Semisoft Cheese: Includes such names as blue, brick, Limburger, Monterey Jack, Mozzarella, Munster, Port du Salut, Roquefort, and Stilton. Blue, Roquefort, and Stilton cheese have streaks of blue mold through them. The mold, which is added at the start of the cheese making process, this gives these particular types of cheeses special flavour. Blue and Stilton are made from only cow’s milk, but Roquefort on the other hand is made only from sheep’s milk ().
Hard Cheese: Cheese, Edam, Gruyere, and Swiss are all popular forms of hard cheese. Gruyere and Swiss cheese have holes in them called eyes. Makers of cheese form these eyes by adding bacteria that produce bubbles of carbon dioxide gas in the cheese. When the cheese is then sliced, the bubbles turn into holes ().
Very Hard, or Grating Cheese: Includes Asiago, Parmesan, Romano, and Sapsago. People often grind such cheeses and use them over foods such as soup, vegetables, pasta and pizza.
