Bloomberg News

Kraft Foods Said to Seek Buyer for Breakstone’s Dairy Business

October 12, 2012

Kraft Foods Said to Seek Buyer for Breakstone’s Dairy Business

Kraft Foods Group Inc. is putting its Breakstone’s sour cream and cottage cheese business up for sale, less than two weeks after its predecessor’s split, said people with knowledge of the situation. Photographer: Tim Boyle/Bloomberg

Kraft Foods Group Inc. (KRFT:US) is putting its Breakstone’s sour cream and cottage cheese business up for sale, less than two weeks after its predecessor’s split, said people with knowledge of the situation.

The business may be worth about $400 million, said two of the people, who asked not to be named since the process is private. The company began pursuing a sale after its century-old forerunner’s breakup on Oct. 1, which separated the Kraft grocery business from Mondelez International Inc. (MDLZ:US), the snacks division that operates mainly overseas.

Kraft may sell a few smaller brands as the company starts to focus on its top-selling labels following the break-up, according to one of the people. The company, led by Chief Executive Officer Tony Vernon, plans to boost marketing spending on more popular banners such as Kraft Macaroni & Cheese, Velveeta, Jell-O and Oscar Mayer.

“They will continue to focus on the power brands,” Ken Shea, an analyst with Bloomberg Industries, said in a telephone interview. “I think there will be ongoing pruning, especially if there is a slowdown and their leverage starts to get too high.”

Leslie Sutton, a spokeswoman for Kraft, declined to comment. The company wouldn’t be alone in trying to shed dairy assets. Dean Foods Co. (DF:US), the largest U.S. dairy processor, is exploring a sale of its Morningstar business, which produces milk products for retailers and restaurants.

Dairy producer Grupo Lala SA of Mexico is said to be interested in Breakstone’s and Morningstar, one of the people said. Luis Rey Delgado, a spokesman for Grupo Lala, declined to comment on whether the company is exploring bids.

To contact the reporters on this story: David Welch in New York at dwelch12@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net


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Companies Mentioned

  • KRFT
    (Kraft Foods Group Inc)
    • $58.3 USD
    • -0.03
    • -0.05%
  • MDLZ
    (Mondelez International Inc)
    • $38.18 USD
    • -0.13
    • -0.34%
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