Kraft Foods, Tazo Tea sign distribution deal

Tazo Tea Company, a wholly owned subsidiary of Starbucks Corporation, and Kraft Foods Global Inc. announced April 7 that they are forming a relationship to significantly accelerate growth of the Tazo brand into grocery channels across the United States.

The new licensing agreement will result in the potential placement of Tazo products in thousands of locations in new grocery channels over the next year, according to a Kraft news release.

Tazo, a premium tea brand, is a leader in natural food stores around the country and, in recent years, has expanded to select distribution in major grocery chains and independents. This agreement will greatly accelerate that process. Specific terms of the agreement were not disclosed.

The deal also capitalizes on the strengths of the two companies by combining Tazo's expertise in creating, sourcing and blending specialty tea products with Kraft's extensive knowledge of marketing, selling and distributing packaged foods to grocery customers.

"Through this partnership, Kraft can leverage its unparalleled expertise in the grocery channel to successfully build the Tazo grocery line nationwide. Tazo will provide Kraft with an all-natural, super-premium tea brand, one that has built its reputation on the artful blending of the world's finest teas and botanicals," said Liz Smith, group vice president and president, U.S. Beverages and Grocery Sectors, Kraft Foods, in the release.

According to Tal Johnson, president of Tazo, "This agreement is an exciting next step in enhancing our growing grocery presence and a significant move toward building a new super-premium tea category in mainstream grocery channels."

Johnson noted that tea is the most widely consumed prepared beverage in the world, except in North America. This is changing as more Americans are drinking tea, making tea a growth category at retail. "Tazo has never been healthier and this agreement will only strengthen our current position."

Kraft Foods markets many of the world's leading food brands, including Kraft cheese, Maxwell House and Jacobs coffees, Nabisco cookies and crackers, Oscar Mayer meats, Philadelphia cream cheese, Post cereals and Milka chocolates, in more than 150 countries.

A wholly owned subsidiary of Starbucks Corporation, Tazo's variety of filter bags, full-leaf, tea lattes, and iced and juiced bottled teas are found internationally in more than 7,500 Starbucks stores, as well as restaurants, cafes, resorts, grocery, specialty and natural food stores.

Oreos reduce fat

In other Kraft news, The Kraft Foods Biscuit Division announced April 6 the introduction of three new varieties of its Oreo cookie that contain zero grams of trans fat per serving. The offerings include a New, Improved Reduced Fat Oreo, as well as new Golden Oreo Original and Golden Uh Oh! Oreo, all with zero grams of trans fat.

Kraft stated that it is one of the first major food manufacturers to reformulate many of its snack products in advance of the Food and Drug Administration mandate to list trans fat content on Nutrition Facts labels by Jan. 1, 2006.

Kraft ranked fourth on the listing of "Springfield Area's Largest Publicly Held Companies" in SBJ's 2004 Book of Lists. Kraft, sold on the New York Stock Exchange under KFT, has 1,180 local employees.