Philip Morris Co. is teeing up its Kraft Foods unit for what could be the biggest initial public offering of 2001, and will certainly be the biggest ever for any Chicago area company.

When the stock of the highly regarded Glenview food processor begins trading later this year under the symbol KFT, individual investors will have their first chance to own a piece of Kraft in more than 15 years, and investor expectation already is stronger than an Altoid mint and quivering with excitement like a bowlful of Jell-O.

The IPO is expected to be priced between $26 and $31 a share, bringing Philip Morris between $7.3 billion and $8.7 billion for the 20 percent of Kraft that it is selling. Underwriters led by CS First Boston are expected to bring the issue to market before the end of June.

That's quite an improvement over the day in 1907 when 29-year-old James L. Kraft, newly arrived in Chicago from Buffalo, N.Y., began selling cheese at wholesale from a rented wagon drawn by a horse named Paddy.

Kraft opened his first cheese processing plant in Stockton, in northwestern Illinois, in 1914, and by 1916, he was processing his own cheese and wholesaling it in five-pound boxes. A decade later came the process cheese called Velveeta.

Miracle Whip salad dressing was Kraft's next big product success, debuting at the Chicago World's Fair, the Century of Progress Exposition, in 1933. Miracle Whip was created to replace mayonnaise, a more expensive product made of egg yolks, vegetable oils and vinegar or lemon juice, whose sales were slipping as the Depression wore on.

Miracle Whip was concocted from a formula Kraft acquired from A.E. Wright Co., when Kraft bought Wright around 1920. Miracle Whip had the texture of mayonnaise, but cost less, and soon won over Depression-era families.

Kraft advertised it with one of the biggest food campaigns ever--22 weeks of almost non-stop marketing including on the weekly ''Kraft Music Hall'' radio show. At the end of the 22 weeks, Miracle Whip was outselling all other brands of salad dressing and mayonnaise.

''The Kraft Music Hall'' opened in 1933 live from New York with orchestra leader Paul Whiteman as host. But three years later, Bing Crosby became emcee and moved the show to California.

''The Kraft Music Hall'' ran an hour on the NBC network until 1943, when it went to a half hour. Crosby hosted more than 300 ''Music Halls,'' all live, and he performed in several each Thursday night to accommodate different time zones.

On the Christmas show in 1941, weeks after the bombing of Pearl Harbor, he sang ''White Christmas'' for the first time publicly.

''The Music Hall'' featured such hit parade-level songs as ''Sioux City Sue'' (''I'd swap my horse and dog for you''), ''Is You Is or Is You Ain't My Baby?'' and ''The Hut-sut Song'' (''The Hut-sut is the boy and girl, and the rilla-rah is their dream''), the latter sung by a regular on the show, Connee Boswell.

Crosby wanted to record his shows for ''electrical transcription'' to his national audiences. He owned the technology to do it, having financed production of equipment copied from equipment taken out of Germany at the end of the war. But Kraft denied him permission, and in 1946 he left ''Music Hall.''

The TV version of ''Music Hall'' was ''Perry Como's Kraft Music Hall,'' which ran from 1958 to 1967. This TV ''Music Hall'' was the successor to ''Kraft Television Theatre,'' which ran from 1953 to 1958.

Back in the supermarket, the Battle over Butter was waging. Budget-conscious shoppers wanted a low-cost alternative to butter, and a vegetable-based product called margarine fit the bill. It just didn't look like yellow butter, and protectionist-minded dairy farmers successfully passed legislation that required Kraft to sell its margarine in an unappetizing uncolored glob encased in plastic wrapping. Margarine--variously called oleomargarine and butterine--tasted like butter, but it couldn't compete in its suspiciously white form. It looked like lard.

So Kraft packaged its oleo with a small tube of yellow coloring. The user would burst the tube in the margarine clear-wrapped package, and squeeze the food coloring throughout the white margarine package before putting it on the table.

In due time, state after state dropped their favored treatment of dairy farmers--at least insofar as margarine was concerned--and allowed the sale of margarine that was pre-colored yellow.

The consumer was probably more aware of Kraft's five-ounce cheese-spread jars, or tumblers, called ''swanky swigs,'' or ''swankies.'' These were routinely cleaned out after use and planted on pantry shelves for use as juice glasses. Swankies, which were produced from 1933 to the late '50s, were eventually classified as ''Depression glass'' by antique dealers, and are found now in stores and at shows everywhere.

Swanky Swigs constituted ''one of the greatest, automatic self-liquidating premium offers in merchandising history,'' the company said. But Kraft wouldn't have sold as many glasses if the lip on the tumblers were threaded to accommodate a screw cap.

So Kraft devised a vacuum-sealed lid that could be replaced to protect unused contents until the glass was emptied.

Kraft has created a track record of growth that consistently has exceeded the standard for other food processors. Not only an efficient processor, Kraft also honed marketing techniques, revitalizing commodities such as cheese by selling it cubed and grated--and priced at a premium.

When Philip Morris acquired Nabisco last year and folded it into Kraft, the company rounded out its grocery of products to include cookies (Oreo) and crackers (Ritz) that it lacked.

Whatever is once lacked, it doesn't lack it anymore, as eager investors undoubtedly will prove later this year.