Corporate Profiles - 2020 - 92

COMPANY OVERVIEW

Kraft Heinz Co.
Company updates long-term strategy, sets growth targets
ore than a year into turnaround efforts, Kraft Heinz Co., Chicago, unveiled a new platform-based strategy
and long-term growth targets on Sept. 15. The
company will seek organic net sales growth of
1% to 2%, adjusted EBITDA growth of 2% to
3%, and adjusted earnings-per-share growth
of 4% to 6%.
"I am extremely confident that unlocking the
power of scale with agility, combined with our
new operating model, will return Kraft Heinz to
consistent and sustainable growth," said Miguel
Patricio, chief executive officer. "We are placing
the consumer at the center of everything we
do, leveraging our greatest assets, strengthening our partnerships, generating fuel that funds
growth investments like our 30% increase in
marketing spend, and creating a clear path to
rebuilding Kraft Heinz into the industry leader
we have the potential to become."
The platform-based strategy includes transitioning the Kraft Heinz portfolio to six consumer-driven platforms from more than 55
individual categories. The platforms are taste
elevation, easy meals made better, real food
snacking, fast fresh meals, easy indulgent desserts and flavorful hydration. An Ops Center,
meanwhile, will focus on the supply chain and

M

is targeting about $2 billion of gross productivity efficiencies.
Kraft Heinz suffered a loss of $10.19 billion
in fiscal 2018 before hiring Mr. Patricio as CEO
on July 1, 2019, to lead turnaround efforts,
which focuses on brand innovation. The company in fiscal 2019 rebounded to net income of
$1.94 billion, or $1.59 per share on the common stock.
Turnaround progress was evident in the
2020 second quarter ended June 27, which
benefited from at-home eating brought on by
COVID-19. Net sales increased 3.8% from the
previous year's second quarter. Net sales in the
United States increased by nearly 9%.
Kraft Heinz is adjusting its content and delivery to reflect greater household penetration
and consumers rediscovering the company's
brands, Mr. Patricio said in a July 30 earnings
call.
"We are learning about who these new consumers

are, and that is our obsession at the moment, is to
keep them with us," he said. "They are new consumers, and they are repeating the purchase of
our products. We cannot miss this opportunity. It's
an unbelievable opportunity."
Kraft Heinz on Sept. 15 also announced a
definitive agreement to sell its Natural, Grated, Cultured and Specialty cheese businesses
to a US affiliate of Groupe Lactalis for $3.2
billion.
"We believe these cheese and dairy businesses will thrive in the hands of a global dairy
company like Groupe Lactalis," Mr. Patricio said.
"At the same time, the transaction will enable
us to build sustainable competitive advantage
in businesses where we have stronger brand
equity, greater growth prospects and can use
our manufacturing scale and consumer-based
platforms approach."
Kraft Heinz bolstered its US leadership team
in 2020. Carlos Abrams-Rivera in February became the new US Zone president. He previously
worked for Campbell Soup Co., Mondelez International and Kraft Foods (now part of Kraft
Heinz). Kraft Heinz in August named Cory Onell
as president of US Sales, Sanjiv Gajiwala as US
chief growth officer and Stephanie Peterson as
head of US Communications. CP

Chief executive officer -
Miguel Patricio

Kraft Heinz net income (loss)

Kraft Heinz net sales

Kraft Heinz share price
$36

$10,941

-$10,192

$1,935

in millions

in millions

$32
$28
$26,076

$26,268

$24,977

2017

2018

2019

$24
$20

2017

92 \ October 2020

2018

2019

Oct.
2019

Dec.

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Corporate Profiles



Corporate Profiles - 2020

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