The new—and we think improved—Kraft Foods Group (NSDQ: KRFT) is offering income investors something to chew on. Kraft is dishing out $2 per share in annual dividends, for a recent yield of 3.9 percent, which is 70 percent more than the typical consumer- staples stock. What’s more, Kraft’s payout is likely to increase substantially as the company restructures.

Virtually all the giant grocery-goods companies are global. But Kraft is taking a different tack. It’s now solely focused on the US and Canada, after being spun off last October from the legacy company, which changed its name to Mondelez International (NSDQ: MDLZ) to reflect its status as an international snack-food purveyor.

With just over $18 billion in annual revenue, Kraft Foods is now the fourth-largest food and beverage company in North America, after PepsiCo (NYSE: PEP), Tyson Foods (NYSE: TSN) and Coca-Cola Co (NYSE: KO).

And Kraft dominates its markets. More than 80 percent of Kraft’s revenue comes from 17 product categories in which it’s the No. 1 or No. 2 best-selling brand, including Kraft cheeses and dressings, Oscar Mayer meats, Planters peanuts, Miracle Whip and JELL-O. Despite its strong brands, Kraft’s profitability has lagged, with 2012 operating margins at 15.3 percent, vs. more than 20 percent for its peers. Also, Kraft’s advertising could be higher. It spends about 3 percent of revenue on marketing vs. 4.5 percent for its peers.

In 2012, Kraft’s sales and earnings were both down, by around 2 percent and 8 percent, respectively. But this year, Kraft’s operations should start to improve.

Keeping it fresh. The US grocery goods market is extremely competitive and faces headwinds from private- label products, unpackaged and organic foods, and the mega-retailers, which have strong bargaining power.

Kraft, for example, makes about 40 percent of its annual sales to just five big retailers, including a quarter of its sales to Wal-Mart Stores (NYSE: WMT).

One of the few ways to increase sales volume and pricing is through new or improved products that are heavily marketed. Kraft is doing this now, as it streamlines operations and reinvests the resulting savings in product innovation.

New and improved products brought in 13 percent of Kraft’s revenue in 2012, up from 10 percent in 2011. This year, it plans to launch 40 more new/improved items. The focus is likely to be on shelf foods, including bottled dressings, cookies, and mayonnaise. Shelf foods are 25 percent of Kraft’s revenue and have by far the highest operating profit margin (28 percent) vs. 16 percent for cheeses and 11 percent for frozen dinners.

Getting lean. Kraft’s restructuring is expected to cost at least $650 million and continue through 2014. This likely means flat earnings for 2013, at around $2.79 per share.

But 2014 earnings are expected to rise 13 percent, to $3.15 per share, as the restructuring costs wind down and savings are realized from lower overhead and a more efficient supply chain. This should result in an operating profit margin of around 17.5 percent by 2016, more than 2 percentage points above current levels.

Second helpings. While the US packaged-food market is not high-growth, it is stable. And Kraft’s dividend is safe and growing. It will likely rise around 5 percent annually, since the company strives to pay out 70 percent of its income as dividends.

At a recent price of $52, Kraft’s stock is up about 17 percent in the past six months. Since the dividend is the main course here, any further appreciation will be gravy.