CHEAP own-label foods sold by big supermarkets are taking a big slice out of profits at Kraft and pose a serious threat to the company’s future as a purveyor of famous brands.

AC Nielsen, the marketing consultancy, revealed that American sales of own-label goods are growing at almost twice the rate of big name brands. Unbranded goods, which are often half the price of their big branded cousins, account for some 16 per cent of all consumer packaged goods sold in America today.

Food manufacturing technology has become so advanced that smaller manufacturers can easily make a facsimile of a famous branded product — an Oreo biscuit for example — and get it to the supermarket shelves for a fraction of the price paid by a company such as Kraft.

Manufacturers of such no-name products do not have the massive overheads in areas such as research and development, quality control and administration that companies such as Kraft have to bear. Kraft and its like have also become a victim of the “Wal-Martisation” of the grocery business. Grocers such as Wal-Mart, which accounts for 14 per cent of Kraft’s revenue, have become so big that they attack Kraft on two fronts.

Firstly they can put the squeeze on prices, effectively dictating the manufacturer’s margin. But more importantly Wal-Mart can show its power by stocking its shelves with cheap imitations of Kraft goods.

Ms Rosenfeld, has a tough task ahead at Kraft. Combating imitators with lower prices and better new products, while keeping big customers such as Wal-Mart happy is no easy feat.