) --

Kraft Foods


is relying on coffee, cookies, chocolate and cheese to rev its productivity in Europe.

The food maker announced today that it will be focusing on higher-margin, priority brands, like Oreo, Philadelphia cream cheese and Kenco coffee, to drive European revenue growth. The company is targeting a 1% to 3% increase.

Kraft expects operating income margins will climb to the mid-teens by 2011, up from 12.3% in 2008.

Earlier this week, Kraft

offered $16.7 billion in cash and stock for Cadbury


, but the British candy maker rejected the offer, saying it was too low.

If the deal were to eventually go through, Kraft-Cadbury would have more than $50 billion in combined revenue.

-- Reported by Jeanine Poggi in New York

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