By: John Schmeltzer and Robert Manor, Tribune staff reporters

June 28, 2006, Chicago Tribune

Irene Rosenfeld spent her first day in her job as chief executive of Kraft Foods Inc., the nation's largest food manufacturer, meeting with employees and reacquainting herself with the company where she spent more than 20 years.

On Tuesday, the hard work started, as Rosenfeld began delving into the Northfield-based food giant's problem areas, including its product development program and its warehousing and store delivery system. It is within those arenas that she will have to decide how to proceed to get Kraft growing again, experts agree.

Charged with turning around such a highly scrutinized company, which has struggled with stagnant stock, sales and profit growth, she is bound to get a lot of unsolicited advice from all corners.

Here's her first batch:

Name: Tom Kuczmarski

Title: President and senior partner, Kuczmarski & Associates, and adjunct professor at Northwestern University's Kellogg School of Management

Background: More than 20 years in consulting; author of four books on innovation and product development

Advice: Rosenfeld needs to move decisively to change the attitude of people at Kraft.

"The mind-set and culture of Kraft now is excessively comfortable with oneself. There is a certain degree of self-satisfaction."

Kraft has depended too long on brand extensions, he said, instead of coming up with innovative new products. "Just adding jalapeno to the cheese does not make it a new product."

Kraft should create sales opportunities in the way that ConAgra Foods Inc. did with its Banquet Crock-Pot Classics: A harried mother comes home from work and needs to prepare a family meal, fast. She doesn't get credit if she uses a microwave, he said, so a ready-to-cook crockpot meal is a great solution. Harried mother takes Crock-Pot Classic package out of freezer before work and puts it in a crockpot. When she gets home, the house smells of dinner.

"It did $130 million in retail sales its first year. It was not another line extension."

Name: Greggory Warren

Title: Food industry analyst, Morningstar Inc., Chicago

Background: Nearly 10 years analyzing food-industry financial results

Advice: "The best thing she needs to do is go through the portfolio and see what brands they would be running for cash and what they should be running for longer-term growth.

"She needs to focus on marketing and answer questions such as, `Why are we spending all this money on Crumbles in cheese when it is a commodity product?'" (Crumbles is Kraft's newest type of shredded cheese.)

Despite the pros and cons associated with healthier-type foods, it is a category that Kraft needs to more fully develop.

But more than anything, Wall Street needs to see some action. "If she comes in and starts knocking things around, then I will be encouraged."

Name: Bill Bishop

Title: President, Willard Bishop Consulting, Barrington

Background: More than 35 years consulting in the food industry, including 30 years as head of Willard Bishop.

Advice: "Kraft really needs to move more aggressively into products that clearly are better for you." Bishop said the category includes foods that have less sugar, less fat and less additives but contain more vitamins, more antioxidants, more fiber and, depending upon product, more energy.

On the process side of the business, Kraft needs to better coordinate its warehouse delivery and store delivery systems.

"The way Kraft operates them, they are two completely different businesses," he said, noting that integrating them could allow Kraft a better chance of developing its next blockbuster product.

And Rosenfeld should work to turn Kraft "into one of the most customer-friendly collaborating manufacturers." Thus, when Wal-Mart says it would like a product but in a different flavor, Kraft should respond by asking, "How soon?" rather than saying it can't do it, he said.

There are many food manufacturers doing that, producing what amounts to a private-label product under their own brand, he noted.

Name: Terry Kearney

Title: Marketing professor, Chicago State University

Background: Taught marketing at the university level for 25 years.

Advice: First, Kraft should do no harm to the brands that it has.

"Kraft has been successful with products that they have kept for 100 years," Kearney said. "That is a real winning strategy."

The company needs to know when not to change.

"You wouldn't take DiGiorno pizza and start messing with it," he said. Some products, like Maxwell House, are almost as much institutions as brands.

Kraft is being squeezed by competing house brands, which are cheaper, and niche brands, which while more expensive are perceived as better quality.

The company needs to develop new markets for existing products among audiences that are not familiar with iconic brands.

He said Hispanic and Asian immigrants or those who are first generation represent an opportunity for Kraft. Advertising in ethnic-oriented print and broadcast is only now beginning to exploit those markets.

"To someone born here, Oscar Mayer would be an everyday thing" Kearney said. "To someone who just got here, Oscar Mayer might be exotic."

Name: Bob Goldin

Title: Vice president, Technomics Inc., a Chicago-based market research company.

Background: Nearly 25 years as a marketing consultant

Advice: "Better marketing of existing products isn't going to get them very far." Kraft needs to expand more into natural foods and enlarge its presence in club stores.

The company also needs to drastically increase product development. "They haven't had a breakthrough innovation in over a decade," he said.

Kraft's last major hit was microwaveable pizza, which debuted in the mid-1990s.

The company this year threw open its doors to new product ideas from outsiders in an apparent indication of the desperation to find the next blockbuster.

"Kraft has got to get into some new businesses, even if they are mature," he said, insisting the company needs to do more with its cash than buy back shares.