Kraft to focus on innovation; introduces MiO water flavoring

February 23, 2011

At the 2011 conference of the Consumer Analyst Group of New York, executives of Kraft Foods reviewed the company’s growth strategy and highlighted progress toward top-tier financial performance. At the heart of this strategy, Chairman and CEO Irene Rosenfeld described a “virtuous cycle” in which focus on Power Brands, Categories, and Markets drives top-tier revenue growth. Concurrently, End-to-End Cost Management expands margins and generates savings that fund additional investments in marketing and innovation. These investments generate further growth, which perpetuates the cycle.

The company explained that it will also boost investment in innovation and NPD to 11% of revenue by 2013, up from 9% last year. The company plans to boost “sluggish” performance in the United States by “revitalizing” its iconic brands though “advertising, innovation, and differentiated marketing.”

It is preparing a number of new product launches in the United States this year including Oreo Fudge Cremes, Philadelphia Cooking Crème, and MiO liquid water enhancers.

According to USA Today, Kraft Foods plans for a March rollout of MiO, a zero-calorie, concentrated line of liquid flavorings—from Berry Pomegranate to Strawberry Watermelon—sold in sleek bottles that look like palm-sized water droplets.

For Kraft, this is the first new food or beverage category in more than 15 years. The last one was DiGiorno rising-crust pizza in 1995. Company executives say it will rank among Kraft’s biggest-ever product rollouts.

Kraft officials say that in an era of personalization, it's all about dripping as many drops of flavor as you want into your water. “This is the next big thing,” said Roxanne Bernstein, Director of the $3.99 MiO brand. (One bottle makes about 24 servings.) “It’s an entirely new category.”

Kraft says it concocted the MiO concept during an “innovation day” summit for its beverage unit last year. The company insists it’s not marketing MiO as better-for-you. The target, Laibe says, is men and women 18 to 39 who prefer to customize their experiences, including what they drink.

Press release

USA Today article