The cheese queen (cont.)

Nineteen seconds: That's how long the average shopper takes to pick out a cheese product during a typical grocery visit. (She spends almost twice as much time in the soda aisle.) Both Kraft and its retail customers want shoppers to linger, as those who buy cheese spend, on average, twice as much in the store as those who do not buy cheese.

Today cheese accounts for roughly a quarter of Kraft's total earnings, according to Prudential Equity Group analyst John McMillin. (Kraft itself declined to provide figures.) But Kraft is facing stiff competition from cheaper private labels as well as fancy artisanal cheeses.

While per capita consumption of all cheese has risen almost threefold since 1970 - from 11.4 to 31.4 pounds, according to the U.S. Department of Agriculture - sales of processed cheese, a category Kraft dominates, are shrinking 2% a year, the company says. "Kraft has to prove that it has its act together in cheese," says McMillin. Rosenfeld knows. "Cheese is a critically important category," she says.

Kevin Ponticelli's job is to bring Americans back to Kraft cheese. The head of Kraft's $4 billion North American cheese business, which includes huge brands like Kraft, Philadelphia, and Velveeta, Ponticelli wants to revitalize the business by, as he puts it, "bringing to life the love of cheese."

He's doing that in part by installing "visual speed bumps" - eye-catching merchandising displays - in the cheese sections of grocery stores. He's also following the Rosenfeld playbook by "reframing" Kraft's position in the $14 billion U.S. cheese market. "We have to stop apologizing for our categories and start reinventing them," Rosenfeld says.

One product meant to do this is Kraft's new Singles Select processed-cheese slices, hitting stores in June. Kraft knows many adults have fond memories of its individually wrapped Singles, but they've since moved on. Singles Select, with its sharper, heartier taste, is Kraft's bid to win them back. Kraft touts the Singles Select as "thicker" than Singles. How much? A spokesman says only that they have a "greater thickness characteristic," whatever that means.

Rosenfeld expects to start winning market share later this year. Not everyone shares her optimism. The head of merchandising at one big supermarket chain says Kraft "hasn't figured it out yet," and Ponticelli agrees Kraft has a way to go. "We're just scratching the surface," he says.

"How's my stock doing?" Rosenfeld's question is hard to make out, coming as it does on the floor of the New York Stock Exchange minutes after the opening bell, which Rosenfeld rang on this early-April day. The bell ringing was a highly orchestrated PR affair, but there's little Rosenfeld can do now to control events - the market holds sway. Kraft's stock has already fallen half a buck, and it will finish the day down 3%.

Many Kraft observers think the stock will probably drop further. Money manager David Dreman, a big Altria shareholder with roughly 16.6 million shares, says he "probably" won't hold his Kraft stock very long because he doesn't want a slow-growing food company in his portfolio.

Back on the floor, Rosenfeld squeezes her way over to Post 9-A, directly under the bell-ringing podium. A man from LaBranche, the specialist firm that matches buyers and sellers for Kraft, takes Rosenfeld through the numbers on his computer screen. There's a sea of cameras and well-wishers around her, and traders scurrying to and fro, but Rosenfeld remains focused on the stock. Her stock. Where it goes will largely determine her fate - and that of the company she grew up in, then spurned, and has now returned to save.

RESEARCH ASSOCIATE Susan M. Kaufman contributed to this article. 

1 2