Kraft Foods Inc lowered its 2011 forecast for earnings growth, as it expects some consumers to be put off by price increases it will take to offset soaring commodity costs.

Chief Executive Irene Rosenfeld said revenue growth this year will be driven more by higher prices, rather than higher volume, since some penny-pinching consumers are likely to cheaper brands or cut back altogether.

There's no question that in the developed markets, both in North America as well as Europe, that consumer confidence remains weak, Rosenfeld said in an interview. We expect it will remain weak for the foreseeable future.

Rosenfeld's comments echoed those made earlier on Thursday by Indra Nooyi, CEO of PepsiCo
, which also cut its forecast, saying planned price increases would be too judicious to completely cushion the blow from commodities.

Kraft has already raised prices on most products it sells in Europe and more than half of those in North America. It plans more increases this year, but it will not be until the second half of the year that those increases will make up for the spike for ingredients such as coffee, cheese and meat.

Shares of Kraft, maker of Maxwell House coffee, Oscar Mayer lunchmeats and Velveeta cheese, fell 2 percent in after-hours trading to $30.50. Pepsi shares closed down 1.6 percent on the New York Stock Exchange.

Kraft said fourth-quarter net income was $540 million, or 31 cents per share, down from $710 million, or 48 cents per share, a year earlier.

Excluding costs related to last year's acquisition of Cadbury, Kraft earned 46 cents per share, meeting analysts' average estimate, according to Thomson Reuters I/B/E/S.

Revenue jumped 30 percent to $13.77 billion, due mostly to the acquisition, which gave Kraft Cadbury chocolate, Trident gum and Halls lozenges. Analysts expected $13.47 billion.

Revenue in North America, excluding the benefit of the acquisition, rose 4.1 percent, with 2.4 percentage points of growth coming from higher volume and mix of products.

Morningstar analyst Erin Lash said the volume contribution was greater than she had expected and was a sign that so far, consumers were embracing the price increases.

It's positive for the quarter, but the sustainability of it is what we need to pay attention to ... especially after they raise (more) prices, Lash said.

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Kraft's 2011 forecast calls for growth of about 4 percent in organic revenue in 2011, excluding the impact of a 53rd week in this year's reporting calendar, and 11 percent to 13 percent in operating earnings.

Kraft's prior 2011 earnings target called for mid-teens growth. The forecast for organic revenue, which strips out currency moves and recent asset purchases and sales, is unchanged.

Yet, the company could end up cutting its forecast again, since it includes sales and profits from bagged Starbucks coffee, a $500 million a year grocery business that Starbucks plans to take over in March.

The two companies are engaged in a court battle over terminating their partnership. Since Kraft argues that their contract remains in place, CFO Tim McLevish said it was prudent to assume that Kraft will continue distributing Starbucks coffee to supermarkets and other retailers.

Should that change, certainly you will know about it, McLevish said, adding that any hit to earnings would depend on timing, payment from Starbucks and Kraft's alternative strategy for selling premium coffee.

Still, he said one analyst's estimate of 4 cents per share was probably a little bit low in terms of the business's historic returns.

(Reporting by Martinne Geller; Editing by Steve Orlofsky, Bernard Orr)