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News

Kraft Heinz: focus to growth and innovation

10/07/2020 - Press release , François-Xavier Branthôme
“…the unknown power of amazing superfoods like tomatoes."

Kraft Heinz is entering a new era:  the company decided to shift focus to growth and sustainability and recently has appointed Cristina Kenz as chief growth officer for its international zone. Reporting to zone president Rafael Oliveira, she will be responsible for setting central strategy, driving innovation and building capabilities across the company's category, marketing, insight and R&D teams. Her experience with both Danone and PepsiCo seems to have informed her priorities as she moves into her new role within the Kraft Heinz organization.
"I would call out three key priorities: firstly, marketing, insights and innovation excellence; secondly, sustainability; and, thirdly, people wellbeing, both inside and outside of the company”. 

Updating the market on Kraft Heinz's financial performance for 2019 - when organic revenue dropped 2.2% - CEO Miguel Patricio said the results were “disappointing”. However, he also set out a roadmap for delivering “best-in-class” financials.
This includes “transforming” the company's capabilities and “making necessary investments in brands” based on “deep consumer insights”. The turnaround “will take time”, Patricio told the market, but Kraft Heinz expects “significant progress” in 2020.
"The company is entering a new era. The new mandate under global CEO, Miguel Patricio, puts the consumer at the centre," Kenz explained, "As he has clearly stated, you can’t cost cut your way into growth, it's an amazing time to join this company." Kenz believes that the period of intense cost-cutting has left Kraft Heinz in a better position to regain momentum through targeted investment.
"To fuel with the right investments will be key, a company that may have lost the ability to engage consumers and grow will ultimately die. As management we are fully aligned on reigniting the consumer and regain leadership in our strategic categories," she explained. 
"The focus will be in insights, innovation and brand building. However, first-of-all, I would like to get a clearer idea of where we have gaps and then ensure that both our capability and focus drives what we have to the max. As a second step, we'll investigate which areas are in need of further funding."
Increasing spending will be done in a strategic way focusing on shorter-term return-on-investment as well as longer-term priorities, Kenz elaborated. 

With household brands like Heinz and Kraft in the portfolio, Kenz is optimistic about the company's capacity to both re-engage with consumers in well developed markets and reach new households in emerging markets. "We have emerging fast growing markets, like China, Brazil or Russia, and we also have big consolidated markets which are very well positioned to recapture the consumer and ignite significant growth, such as the UK."
"We have amazing brands like Heinz that can be raised as a true powerful “Masterbrand”, nimble and very interesting local brands like Orlando in Spain or Plasmon in Italy or Quero in Brazil, and some amazing products that range from protein soups in Australia, to sauces in the East that could be leveraged across other markets. And... We have the unknown power of amazing superfoods like beans and tomatoes."
With powerhouse brands and the right strategic focus, Kenz is bullish on the company's prospects to step up the pace internationally: "I love making changes to big things, and we're lucky to have some hidden big opportunities at an international level."

For some time, Kraft Heinz's legacy brands have seemed slightly out-of-step with emerging consumer trends. Unlike many of its peers, the group has failed to focus on communicating its sourcing or sustainability stories. And while many of its products tick boxes like being plant-based, this selling point has not been leveraged to its full extent.
All this could be about to change, particularly in the wake of the coronavirus crisis.
"This crisis has accelerated some consumer attitudes that were already growing year-on-year. As a company we'll reignite our sustainability and corporate social responsibility alongside strong innovation and brand growth," Kenz revealed. She believes that there is “huge potential” in the company's portfolio and categories to align with consumer trends. And, in particular, Kenz sees an exciting future for the Heinz brand internationally.
"We have a responsibility to feed the world, to drive nutrition and to do so with the planet in mind. And we can do all that... adding great taste to our lives."

Kraft Heinz turnaround to be fueled by innovation
Miriam Ueberall recently joined Kraft Heinz to head up research and development for the group's international zone, which is covering markets as diverse as Europe, China, Japan, Australia, Latin America, Russia, and the Middle East.

After a 20-year career in the FMCG industry, including most recently a 13-year stint at Unilever, Ueberall made the decision to join Kraft Heinz “at a time of change”. "I believe innovation has a huge contribution to make. [It is] a big opportunity to be part of the transformation, to set us up for the future. And clearly R&D is playing a significant role in this."
Looking at Kraft Heinz's past strategy, Ueberall conceded that “innovation was not always at the forefront” and noted a “very strong focus on operational efficiencies. […] We have very strong expertise in many capabilities.... I do think that the importance of innovation will gain in the future. And my role is to make sure that the technologies that we are developing […] meet the business strategies and business objectives. […] The technologies we're working on are looking at the future and obviously they should play a role giving us a competitive edge," she explained. 

Ueberall explained the company has “very strong technologies” in the area of packaging as well as efforts to improve the nutritional profile of its portfolio. “Clearly we are developing our technology agenda in this area. We are also looking at the technologies of the future to create healthy, appealing products that deliver consumers expectations."

From reformulation to 'positive nutrition'
For Ueberall, striking a balance between renovating the existing portfolio and creating “new news” is key. Ueberall revealed that Kraft Heinz is concentrating on a dual pronged approach to delivering healthy products, with a focus on reformulating existing lines and developing areas where the company's brands can provide “positive nutrition”: "We are aware of the public discussion on salt and sugar and we have led the agenda in sauces to reduce salt and sugar."
Consumers desire healthier foods but are not willing to compromise on taste. Cutting salt and sugar levels in well-known products is therefore a balancing act. Taking the UK as an example, Kraft Heinz has cut sugar and salt in its name-sake spaghetti hoops by 24% and 61% respectively, while its salad cream recipe now contains 19% less sugar and 35% less salt.
In Heinz Tomato Ketchup - a more challenging recipe to shift while maintaining taste - the company has cut total sugars by 8% and salt by 40%. In addition to this, Kraft Heinz has taken a more overt approach for consumers seeking significant reductions with the roll out of Heinz Tomato Ketchup with 50% less sugars and salt and Heinz Beanz with 50% less sugar and 25% less salt.

Ueberall said the company takes a strategic and nuanced approach to the decision to either reformulate the existing portfolio or launch new SKUs. "It really depends on the local market environment. There might be a conscious choice where you want to shift the whole market standard - but there might also be other areas where you make a conscious choice to extend the portfolio and therefore broaden the consumer appeal. "You need to be extremely understanding of consumer needs."

Source: foodnavigator.com
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