The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



) --Cadbury has given a significant push to




first-quarter earnings.

Revenue for the quarter increased 11%, to $12.6 billion, as sales rose 40% in India, and 20% each in China and Indonesia. Kraft's Cadbury acquisition and focus on emerging markets like India, China and Brazil seems to be paying off.

But rising commodity prices will continue to put pressure on food companies like Kraft Foods, Nestle,


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Kraft's acquisition of Cadbury has significantly increase revenues and increased exposure in emerging markets.

While we estimate Kraft's market share in the chocolate & candy market will reach roughly 15% by the end of our forecast period, Trefis members predict that it will cross 19%, implying about 6.5% upside to our KFT stock price estimate.

We currently have a price estimate of $36.43 for Kraft Foods's stock, implying a slight premium to market price.

With the acquisition of Cadbury, Kraft's portfolio has expanded beyond 40 confectionery brands, each with annual sales of more than $100 million. Kraft has now become the biggest player in the global chocolate industry with popular brands like Dairy Milk, Creme Egg, Flake, and Green & Black's. Kraft's global market share in chocolates and candies currently stands at 12.5% by our estimates.

In addition to owning some of the more popular confectionery brands, Cadbury has also helped Kraft expand its global reach, mainly in the European Union and the Asia-Pacific region. For example, in India, Cadbury is almost synonymous with chocolate, given that the company has been present for more than 60 years in the country selling popular brands like Dairy Milk, 5-Star and Perk. Cadbury also expanded Kraft's presence in Europe's chocolate markets of Poland, Russia, and France.

Emerging Markets Push

Kraft has indicated that its profits in the Asia-Pacific region have recorded double-digit growth since 2008. Kraft is looking to penetrate the lucrative Indian market by leveraging the Cadbury brand to sell its own flagship Oreo cookies and powdered beverage Tang. India has become the fastest growing market in Asia-Pacific for Kraft with around 40% growth during Q1 2011, double the 20% growth for China and Indonesia.

Earlier this month, Kraft announced the opening of an $80 million manufacturing plant in Brazil producing chocolate and powdered beverages. Kraft maintains that Brazil is one of its 10 priority developing markets and plans to invest $200 million in the region over the next two years.

See our complete analysis for Kraft Foods stock


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