Kraft Foods Group's Cheese segment saw significant consumption growth in Kraft natural cheeses and Velveeta in the first three months of the year. The  segment's operating income growth reflected solid volume/mix, overhead cost savings and lower manufacturing costs driven by net productivity that were partly offset by the negative impact of pricing net of commodity costs and higher Restructuring Program costs.

Kraft, Northfield, Ill., made the comments today in releasing its first quarter 2013 results. Dairy Foods named Kraft the 2011 Processor of the Year.

"We're off to a solid start," said Tony Vernon, CEO of Kraft.  "Our first quarter results reflect strong returns on our new product innovations to date, as well as the fact that our cost savings outpaced our plans to reinvest in our brands.  In the months to come, we'll execute our marketing playbook more broadly across our portfolio and we expect to see good progress in both top- and bottom-line performance for the full year."

Net revenues in the first quarter grew 2.1% to $4.5 billion. Organic Net Revenues increased 2.1% from volume/mix gains of 2.4 percentage points that were partly offset by a 0.3%age point impact from lower pricing.

In the Grocery segment, Kraft said top-line gains from investments in innovation behind brands such as Velveeta dinners and Kraft Macaroni & Cheese were offset by weakness in JELL-O ready-to-eat desserts, Kraft dressings and Planters snack nuts. Operating income declined as a combination of marketing investments, lower volumes and higher Restructuring Program costs more than offset significant overhead cost savings.

In the International & Foodservice segment, strong revenue growth in Canada from Cracker Barrel cheese, Philadelphia cream cheese and MiO liquid water enhancers was partially offset by product line pruning in Foodservice.  Double-digit operating income growth was driven by improved product mix, and lower overhead costs, partly offset by a significant increase in marketing.

For more information, visit the Kraft website.