Kraft all but admitted that Mr Deromedi, who has been chief executive of Kraft since 2003, was not the right man to take the company forward as an independent food manufacturer and appointed Irene Rosenfeld, the chief executive of Frito Lay, the crisps company, to replace him.

It has long been speculated that Kraft would separate from Altria, the former Philip Morris, maker of Marlboro cigarettes, but the company has balked at setting a timetable.

In a speech to employees yesterday, however, Louis Camilleri, the Kraft chairman, indicated that the spin-off was now a certainty.

“While the fundamentals of the business continue to improve, we are confident that Irene will accelerate the execution of Kraft’s growth strategy, build value for shareholders and lead Kraft when it becomes a fully independent company.”

Mr Camilleri had nothing but praise for the outgoing Mr Deromedi, whom he said had reached a mutual agreement with the board to step down.

A spokeswoman for Kraft said that the board believed that Ms Rosenfeld was a more appropriate choice to lead the company. “Irene is a better leader to take us forward as an independent company,” she said.

Shares of Kraft have dropped 1.3 per cent since Mr Deromedi took over the company in December 2003. General Mills, the company’s biggest competitor in America, has enjoyed an 8.6 per cent share price gain during the same period.

Investors have been waiting for the spin-off from Altria for Mr Deromedi’s entire tenure, but no concrete plans have been put forward until now. Mr Deromedi is responsible for divesting brands worth about $1.7 billion (£930 million) in annual sales, cutting 14,000 jobs and closing 40 factories in a little under three years.

All these actions were designed to prepare the company for spin-off, but Mr Deromedi was unable to grow the business quickly enough to keep pace with the expectations of Wall Street and the Kraft board.

Rising costs of raw ingredients such as milk, sugar and flour used to make Kraft’s signature Oreo Cookies and packaged cheeses have sliced hefty chunks from the bottom line.

Kraft’s entire product line has also come under siege from cheap own-label brands sold by giant retail chains such as Wal-Mart and Target.

Kraft sales last quarter grew less than 1 per cent to $8.12 billion, the smallest gain in almost four years. A tax benefit was responsible for a 41 per cent increase in net income to $1 billion, or 61 cents a share, from $713 million, or 42 cents, a year earlier. Revenue has grown by 5.2 per cent a year since 2001, trailing the almost 8 per cent growth by Kellogg, the largest American cereal maker.

Shares of Kraft, which have climbed 11 percentage points this year, plunged in early trading as news of Mr Deromedi’s departure filtered into the market. They quickly improved as investors realised the implications the change would have for the long-awaited spin-off.

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