With the positive effects of a multiyear restructuring trumping a couple of quarters of negative volume trends, Kraft Foods (NYSE: KFT) now appears on track for healthy growth. The maker of Oscar Mayer meats, Triscuit crackers, and the eponymous Kraft Singles reported profit and margin gains in its second-quarter report, even as revenue fell.

Net income rose 11%, besting even the first quarter’s 10% gain. Earnings per share came in at $0.56, compared with $0.49 in the year-ago period. From cereal and snacks maker Kellogg (NYSE: K) to the more diversified ConAgra (NYSE: CAG), food producers have focused intently on cost control, and operating gains at Kraft chipped in an entree-sized $0.05 per share.

When it comes to GAAP results, the strong dollar has been a yappy dog snapping at the ankles of U.S.-based companies, as shareholders in global giants such as Philip Morris International (NYSE: PM) can attest. On that note, it was refreshing to see that a lower tax rate for Kraft, combined with fewer outstanding shares, fully offset the negative effects of currency rates.

Following worrisome declines in prior quarters, consumers purchased more Kraft products, driving volume slightly higher. That's good news, especially since the company was able to increase prices by about 2.7%. Kraft isn't fully in the clear -- a sudden wake-up call to economic realities could cause consumers and retailers alike to cut back on purchases – but the higher sales are an encouraging sign.

The U.S. Cheese segment, which contributed 10% of 2008 sales, performed somewhere between blue-ribbon cheddar and rotten limburger. Revenue there was off 8.7%, on a small volume decline and a large price cut. Still, operating profit in the segment grew 16%.

What gives? Well, dairy costs went down substantially, and Kraft was able to capitalize with its adaptive pricing model, eking out a profit gain. If Kraft can fully stabilize volume in this segment, delicious, gooey profit should flow onto shareholders’ nachos.

In the geographic breakdown, developing markets took center stage, increasing organic net revenue by 9.3%; Latin America showed particularly strong growth. With roughly one-fifth of company sales coming from developing regions, Kraft looks well-positioned to ride the tide of increasing prosperity among emerging-market consumers.

For the remainder of the year, management bumped up EPS guidance, and once again projected double-digit earnings growth on a currency-neutral basis. 

Kraft shares have risen substantially from their March low, but given a forward P/E of almost 15, and the company's improved business performance, I don’t see that valuation bubbling over. Still, shares of smaller rival ConAgra look like a better buy. Speaking strictly of growth prospects, General Mills (NYSE: GIS), which is much more than a cereal company, and private-label food producer TreeHouse Foods (NYSE: THS), are arguably better-positioned. Finally, global competitor Unilever (NYSE: UL) boasts greater developing-markets exposure, and it's trading at a discount to Kraft.

In the end, while Kraft by no means looks like a bad buy, you might pass up a better investment by pursuing the food sector's biggest name. And that, fellow Fools, is nothing to dunk a celebratory Oreo about.