Kraft, one of the world’s biggest food brands, to be phased out in Australia and New Zealand

KRAFT is set to disappear from shelves in Australia and New Zealand by the end of the year. Which leads to a vital question - what happens to Vegemite?

KRAFT is a brand that has graced the shelves of Australian grocery stores for more than 90 years. Two thirds of our homes include one or more of their products.

Yet, despite it being one of the world’s biggest brands — worth $12 billion globally according to Forbes — by the end of the year it will have disappeared from Australia and New Zealand altogether.

The brand first arrived in Australia in 1926, and the name ‘Kraft’ has adorned everything from Mac & Cheese to Vegemite. But despite it being worth more than Nestle or Kellogs, it’s now headed to the brand bin.

While the products themselves will remain, the Kraft name is being sidelined. This month, Kraft Singles was replaced by UK brand “Dairylea Slices”.

Soon the familiar Kraft logo will no longer even adorn jars of peanut butter. Instead, Australia get ready for “The Good Nut” spreads.

“Woah”, said the cow. “What happened to Kraft Singles?”

A branding expert says changing brands is fraught with difficulty and could lead consumers to think they are buying Aldi style look-a-like private label products.

“The Kraft name symbolises familiarity. When shoppers go to the chiller it has that recognition,” said University of Adelaide marketing expert Dr Dean Wilkie.

“Removing the Kraft name runs the risk that many people will not hear about the change. In a perfect world you’d keep it,”

Killing off Kraft was never the plan. Rather, the name has fallen victim to a complex series of takeovers and demergers that has left Kraft’s products in the bizarre position that — in Australia — they are no longer even owned by Kraft.

‘K for Kraft’ — the US brand has been an Australian staple for 90 years.

Born in Chicago, Kraft might be a US brand but it’s been in Australia from very early days.

In 1926, Melburnian Fred Walker, the man who gave the world Vegemite, persuaded James Kraft, the man who gave the world cheese slices, to give him the Australian patent for processed cheddar.

With the patent came the Kraft brand and after Walker’s death the US company took full ownership of the Australian offshoot.

And that’s the way it stayed until 2010 when Kraft controversially bought British chocolate icon — and Australian favourite — Cadbury.

The most perverse love child of this union was the short lived Cadbury Dairy Milk and Vegemite combo. The less said about that the better.

The most bizarre outcome of the Cadbury-Kraft takeover was this rather odd chocolate bar. Picture: Supplied

Just two years later, Kraft decided it was all too much and split into two. Kraft would concentrate on North America where the company’s main product was cheese. While the newly formed Mondelez company — basically Cadbury plus Oreo — would focus on sweet products elsewhere.

Problem was, in Australia, Mondelez got lumped with Kraft cheese and Vegemite as well as lollies and biscuits.

In summary, a company no longer connected with Kraft had to pay Kraft royalties to make products with the Kraft name they no longer even wanted to make.

Unsurprisingly, Mondelez decided it would be simpler to sell the whole lot. In January, it inked a $460m deal with Bega cheese, and sold off the Kraft products allowing Mondelez to “focus its portfolio on its core snacks categories”.

Bega has now bought all of the Australian Kraft products, from Vegemite to Kraft Cheddar.

But Mondelez has been quietly ditching Kraft for some time. First it vanished from Vegemite, then Philadelphia.

Dr Wilkie told news.com.au these were the easy brands to change because the Kraft name played second fiddle.

“With Vegemite, people appreciate the taste so much, the actual Kraft name doesn’t bring too much to it, it’s not that big a negative to not have it.

“But when it comes to other products where the Kraft name is more prominent (like Kraft Cheddar, Mac & Cheese and peanut butter) removing it has the risk that many people may not hear about the change,” he said.

Vegemite no longer bears the Kraft name.

Once, the Kraft name was big on Vegemite jars.

Mondelez has confirmed to news.com.au that other products with the Kraft name will soon be changed. In a recent press release it said, jauntily, “We don’t want to bore you with the details, but due to licensing changes, Kraft Singles will now appear under the Dairylea brand.”

Kraft Cheddar will soon become Dairylea Cheddar and The Good Nut will adorn all spreads.

It’s due to “boring legalities,” the company said and stressed the jars are only “slightly refreshed” and it’s the “same great tasting spread”.

Australians have a mixed relationship with Kraft. After all, it’s the brand that reminded us all that Australia’s Vegemite was actually US owned.

“The Good Nut” brand has started appearing on peanut butter jars. Soon the Kraft name will be gone.

Dr Wilkie said consumers had become used to local brands being owned by overseas companies. “But I don’t think anyone will miss Kraft. No one is aware of the Kraft story; it’s just an established name that brings reassurance,” he said.

“With Cadbury there’s joy and happiness; people gift blocks of chocolate, but no one gifts a block of cheddar,” he said.

“If you think of marketing trends it’s all about smaller brands now, dairy farmers and craftsmanship rather than profit.”

In an investor presentation, Bega said the licence to use the name Kraft would end in December 2017 and it was “considering a number of brand transition options”.

With the sale not yet complete, Bega told news.com.au they couldn’t say whether they would seek a deal to keep the name on some products or whether Christmas will be the last hurrah for Kraft. They also wouldn’t say if they would eventually replace the Dairylea brand with its own name, perhaps creating “Bega Mac & Cheese”.

Dr Willkie said six months was a tight deadline to get shoppers used to a new name

“Changing brands takes time and investment and without that it’s going to be tricky to re-establish the brand equity Kraft had.

“Most people will have a repertoire of brands they choose from so if they don’t see Kraft peanut butter they may just go with another name they know,” he said.

The Dairlylea brand will replace all the Kraft cheese brands.

Worse still, they might mistake Dairylea or The Good Nut for a private label.

“If you are not aware of the changeover, you might think it’s a glorified me too product. Aldi could benefit because they already have similar packaging.

“In a perfect world if they could use the Kraft name for free, you’d keep doing it because the key to success is being top of mind. But if Kraft wants to charge for it then the simple maths might be to drop it, take the hit now and re-establish another brand.”

But even if Kraft does soon disappear, it could yet be reincarnated in another form.

In 2015, Kraft was taken over by US giant Heinz which already has a substantial Australian presence. KraftHeinz, as it’s now called, will retake Australian custodianship of the Kraft name in 2018 - but for a whole different range of products - not the ones you know now.

The newly formed KraftHeinz says it could bring back the Kraft name to Australia in the future.

“The versatility and iconic status of the Kraft brand makes it ideal for future innovation in line with consumer preferences and trends,” a KraftHeinz spokeswoman told news.com.au.

KraftHeinz did not reveal a time line, or specific products they would be looking to launch here, so there could be several years of Kraft-less supermarket aisles. It’s also unlikely they, at least initially, will compete with the current range.

“It’s a brand that we love and are excited to welcome back to our portfolio. Over time, the brand will get stronger again,” she said.

So perhaps it's less of a goodbye to Kraft, and more, “until we meet again”.

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