The Kraft Cheese Origin Story: Who Made It?

Kraft cheese is a brand of processed cheese products manufactured and sold by Kraft Heinz. The company was founded by James L. Kraft in Chicago in 1903 as a wholesale cheese-delivery business. In 1906, Kraft and his brother Charles began processing cheese for distribution to area retailers. Kraft Singles, introduced in 1950, are individually wrapped cheese slices that are formed separately during manufacturing. The product was initially called Kraft De Luxe Process Slices and was the first commercially packaged cheese slices in the world.

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Kraft's beginnings

The Kraft brothers revolutionized the cheese industry by patenting a spoil-resistant processed cheese product. This innovation not only reduced waste but also extended the shelf life of cheese, addressing the challenges of traditional cheese wedges that crumbled easily and had a short shelf life. Their product proved invaluable during World War I, as the US Army purchased large quantities of it.

In 1927, the company made a significant acquisition, purchasing Velveeta, a process that blended cheese and cheese byproducts to create a smooth and creamy texture. The following year, they merged with the Phenix Cheese Company, bringing another popular product, Philadelphia cream cheese, under their umbrella. The company, now known as Kraft-Phenix, continued to grow and, in 1930, was acquired by the National Dairy Products Corporation.

The innovation continued within the Kraft family, as Norman, the younger brother of J.L. Kraft, began experimenting with a new method of cheesemaking in 1935. He created the first cheese "slice" by pouring hot liquid cheese onto a cold stainless-steel table and cutting it. This invention, along with modifications to the refrigeration method by Norman's nephew, an engineer, laid the foundation for the convenient and melty cheese slices that Kraft would become famous for.

During the Great Depression, Kraft introduced another iconic product: a box of dried pasta combined with a package of long-shelf-life processed cheese, later known as Kraft Macaroni & Cheese. The company's focus on innovation, convenience, and extending the shelf life of cheese products set the stage for its future success and expansion into various food categories.

Kraft Singles

In 1935, Norman, the younger brother of J.L. Kraft, began experimenting with a new method of cheesemaking. He poured hot liquid cheese onto a cold stainless-steel table and cut it into slices, coining the term "cheese slices." Norman's nephew, an engineer, further refined the process by using a chill roll, enabling continuous cheese slice production. During World War II, Kraft temporarily halted cheese production to focus on supplying pre-served butter spreads and canned cheese to the armed forces.

In 1947, Kraft tested its new cheese slices in Detroit, but initial sales were disappointing as customers didn't realize the cheese was pre-sliced. However, a frustrated salesman accidentally discovered that stomping on the package created perfectly peeled slices, and word soon spread about the convenience of Kraft's sliced cheese. In 1950, Kraft introduced Kraft DeLuxe, the world's first commercially packaged cheese slices, initially without individual wrapping.

In 1956, Arnold Nawrocki, an engineer unassociated with Kraft, invented a machine that wrapped each slice in transparent paper, revolutionizing the product's packaging and marketing. Finally, in 1965, Kraft Singles as we know them today—individually wrapped cheese slices—hit the stores, offering customers the convenience of using one slice while keeping the rest fresh. Over the years, Kraft Singles have become a staple in American households, with ongoing innovation in flavours and varieties.

Kraft's mergers

Kraft Foods has a long history of innovation in the cheese industry, from creating the first cheese "slice" in 1935 to introducing individually wrapped cheese slices in 1965. The company has also undergone several mergers and acquisitions over the years, transforming the industry and expanding its global reach.

One of the most significant mergers in Kraft's history was the creation of Kraft Heinz in 2015. Kraft Foods Group, Inc., an American food conglomerate, merged with H.J. Heinz Co. to form a new entity, The Kraft Heinz Company. This merger was facilitated by investment firms 3G Capital and Berkshire Hathaway, with the latter owning Heinz and the former having a stake in both companies. The combined entity became the fifth-largest food and beverage company in the world in terms of annual sales.

The merger provided significant benefits to both companies. For Heinz, it offered an opportunity to leverage Kraft's well-known brands, such as A.1., Velveeta, and Planters, and expand their sales outside of North America. Kraft, on the other hand, derived most of its sales from North America, so the merger provided a platform for international growth. The management of the newly merged company expected to achieve substantial cost savings through economies of scale, particularly in the North American market.

To sweeten the deal for Kraft's shareholders, they received a one-time cash dividend of $16.50 per share, totaling $10 billion, funded by 3G Capital and Berkshire Hathaway. The shareholders of Heinz held a majority stake in the new company, with 51%, while the remaining shares went to Kraft's shareholders. The agreement was approved by the boards of directors of both companies, demonstrating their confidence in the potential synergies and growth opportunities presented by the merger.

Prior to the merger with Heinz, Kraft had undergone several other notable changes. In 2012, Kraft Foods Inc. announced plans to split into two publicly traded companies, focusing on snack foods and grocery businesses, respectively. This led to the creation of the Kraft Foods Group, Inc. as a separate entity for the North American grocery business. Additionally, in 2012, Mondelez International was spun off from Kraft's parent company to focus on international growth, acquiring the rights to sell many shared brands outside of North America. These transformations laid the groundwork for the eventual merger with Heinz, shaping Kraft's global presence and brand portfolio.

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Kraft's advertising

One of Kraft's most famous ad campaigns centred on the claim that each 3/4-ounce (21-gram) slice of Kraft Singles contained "five ounces [140 grams] of milk", making it taste better than imitation cheese slices. This campaign, however, faced criticism and eventually led to a ruling by the Federal Trade Commission in 1992 that ordered Kraft to stop making misleading representations in its advertising.

Kraft has also utilised TV commercials as a key component of its advertising strategy. These commercials often encourage viewers to create delicious meals at home with Kraft products, such as taco nights or pizza parties. Kraft Singles TV spots have featured celebrities and songs by popular artists like Nicki Minaj, Latto, and Andy Grammer.

In recent years, Kraft has continued to adapt its advertising strategies to the digital age, utilising social media platforms like Facebook, Twitter, and YouTube to connect with consumers. The company has also employed real-time attribution technology to optimise its campaigns across platforms and ensure maximum return on investment.

Kraft's sales

One of Kraft's earliest innovations was the patenting of a spoil-resistant processed cheese, which proved popular during World War I, with significant sales to the U.S. Army. This was followed by the acquisition of Velveeta in 1927, a blended cheese product, and the merger with Phenix Cheese Company, adding Philadelphia cream cheese to their offerings. These moves expanded their cheese business and laid the foundation for future sales growth.

In the 1930s, Norman, the younger brother of J.L. Kraft, played a pivotal role in the development of cheese slices. By pouring hot liquid cheese onto a cold stainless-steel table and cutting it, he created the first cheese slice. This invention faced initial challenges, as customers in Detroit in 1947 struggled to recognise the concept of pre-sliced cheese. However, with perseverance and improved packaging, Kraft Singles gained traction and became a household staple.

Kraft Singles were officially introduced in 1950, providing individually wrapped slices that revolutionised convenience and reduced waste. This innovation was further enhanced by Arnold Nawrocki's invention of a machine that wrapped the slices in transparent paper, making it easier for consumers to separate them. The product's popularity led to it becoming one of America's favourite cheeses, with continuous sales and new varieties added over time.

Over the years, Kraft's sales have been bolstered by acquisitions and expansions into new markets. Notable acquisitions include Cadbury chocolates, Groupe Danone's biscuit division, and the merger with Heinz in 2015, forming Kraft Heinz, the fifth-largest food and beverage company in the world. These moves have diversified Kraft's product portfolio and expanded its global reach, contributing to its sales performance.

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