Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.
“I’m delighted to be speaking with you today as Kraft Foods Chairman and CEO. And while it’s still early in my tenure and I’m deep in the learning cycle, and I’ll tell you upfront that I’m not far enough along to be able to answer all the questions you may have about our plans for the future today.”
Commodity basket trending down, may pressure top line
“On the macro front, it would have to be commodities and currency. Based on the spot market in futures, Kraft’s commodity basket is trending down. This brings with it some risk that net price reductions will pressure our top line. But it lessons one of the most significant cost pressures we faced in 2014.”
2014 was disappointing
“On the whole, I think you’d agree that 2014 for Kraft, and for that matter, the broader food industry, was both difficult and disappointing.”
Share has been flat for a long time
“Yet Kraft Foods hasn’t gained share as a company for some time. And in 2014, we did not grow share in any individual category. We merely held flat at 60% of our US businesses, and lost share in the other 40%.”
Must use digital tools to improve marketing
“We must better-leverage consumer insights and emerging digital tools to achieve an advantage in this area and reach the right consumers at the right time. We also must instill new return-on-marketing disciplines at every relevant level of our organization. We can’t continue to spend without adequate returns.”
The problems in this marketplace are not daunting. We just need to execute
“so Brian, you know my view of Kraft was – mostly as being a chairman and a board member, so I – but I certainly watch the industry carefully and the industry has changed. I wouldn’t call it dramatic, I’d call a continuous. And so I certainly expect the industry to continue to change.
What remains and that is in terms of what’s happening at the retail level, what’s happening with additional brands in these categories and so forth, and with respect to consumers desire to find great value and high quality. And so I would tell you that, I don’t think that Kraft has done as aggressive a job in this regard as we need to do and will do going forward.
And so, I don’t view the changes in this marketplace to be daunting or problematic particularly for company like Kraft with its incredible trademarks. We just need to execute better.”
Need to develop a turnaround mentality
“This is not a broken company by any stretch. But we do need to adapt a turnaround mindset in many ways and that is going to be mostly around, as I said earlier this pace of change, this focus on execution and this return on investment”