The Kraft Heinz Company (formerly HJ Heinz) (US)

Profile subscribers click here for full profile

The Kraft Heinz Company was formed in 2015 by the reverse takeover of iconic North American food group Kraft by investor-controlled HJ Heinz. It had already been quite some time since Heinz had the 57 varieties championed by its long-running slogan. In fact there are now closer to 5,700 in all, even if the one most people think of is flagship brand Heinz Ketchup (backed up in the UK by its Baked Beans, of course or Salad Cream). Even before the Kraft deal around two-thirds of sales were generated by products that don't use the Heinz name. The portfolio also encompassed baby food, frozen potatoes and prepared meals, with brand names including Farley's, Wattie's, Weight Watchers, Ore-Ida and Honig. In 2013, the group accepted a private buyout (for $28bn) by investment group 3G Capital and billionaire Warren Buffett's Berkshire Hathaway. In March 2015, those investors negotiated an even bolder deal to merge Heinz with rival Kraft, adding Kraft cheese, Oscar Mayer, Philadelphia and Jello-O to the existing portfolio. Combined sales for the merged group are around $26bn.

Selected Heinz advertising

Which agencies handle advertising for Kraft Heinz? Find out more from Adbrands Account Assignments

Who are the competitors of Kraft Heinz? See Food Sector index for other companies

Subscribers only: Adbrands profile
Account assignments & selected contact information

Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. The Adbrands Company Profile of Kraft Heinz summarises the company's history and current operations and also contains the following website links:

Kraft Heinz website

Brands

Boston Market HomeStyle Jack Daniel's Grilling Sauce
Bagel Bites Nancy's
Heinz Ketchup Ore-Ida
Wyler Rosetto
KDR Classico
Greenseas Weight Watchers
Heinz Direct Heinz Stuff
Plasmon Mr Yoshida's
Salad Cream Honig

Worldwide

Heinz Baby Food (Canada) Heinz (UK)
Heinz (France) Heinz (Korea)
Heinz Wattie's Australia Heinz (Czech Republic)

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 21st Sep 2017: Virtually the only member of Kraft's senior executive team to have stayed on-board following the merger with Heinz is to step down next month. George Zoghbi will move to a new position as strategic advisor to the board, and his role as head of US commercial operations at Kraft Heinz Company is to be assumed by current CFO Paulo Basilio. The latter is himself replaced as CFO by 29-year-old David Knopf. Both men are also partners as controlling shareholder 3G Capital.

Adbrands Weekly Update 15th Sep 2017: Ads of the Week "Geoff: The Film". There's a strong touch of Pixar in this charming tale of one man's obsessive quest for the perfect Heinz Beanz serving, from Y&R Australia. It's an unusually lavish piece of work from Kraft Heinz, a company that tends to prefer its marketing stripped-down to basics. A bigger finish might have added to the overall effect, but it's still a lovely little film.

Adbrands Weekly Update 23rd Feb 2017: The Brazilian investors behind 3G Capital blotted their hitherto spotless copybook with a botched attempt to add Unilever to their portfolio. Jorge Paulo Lemann and his partners have in less than ten years seized control of a string of iconic North American businesses including Anheuser-Busch, Kraft, Heinz, Burger King and Tim Hortons. Buoyed up by their equally successful recent assault on Anglo-South African SABMiller, they attempted another move into Europe by targeting Anglo-Dutch icon Unilever. On Friday, following a breaking news item in the Financial Times, 3G-controlled Kraft Heinz confirmed that it had made an offer to acquire Unilever - roughly twice its size by revenues - for around $50 per share in cash and stock. That offer had been rejected, Kraft Heinz said in its statement, but "we look forward to working to reach agreement on the terms of a transaction". Don't bet on it, was the angry public response from the target company, which said the offer was "not the basis for any further discussions" and had "no merit, either financial or strategic". It quickly became clear that Kraft Heinz would face considerable opposition not only from Unilever's board but also from the British and Dutch governments.

As a result, in an extraordinary volte face, Kraft Heinz pulled the plug on its strategy on Sunday evening, not much more than 48 hours after the bid was publicly confirmed. All a bit of a mess. The biggest surprise here is that Kraft Heinz and 3G seem to have been so ill-prepared for opposition to their plan. Yet Unilever CEO Paul Polman had already firmly rejected an initial private approach from Kraft Heinz chairman Alexandre Behring, and with a value of $143bn, this would have been the second largest corporate takeover in history after Vodafone-Mannesman; a mammoth undertaking. Opposition was inevitable, yet 3G not only ignored all the early warning signs but had no plan in place to counter resistance.

So where next for 3G to go shopping, with what is reported to be a $15bn war chest of deployable capital? They will almost certainly be considering another US-based acquisition for Kraft Heinz. The main problem with 3G's cost-cutting strategy - already implemented with ruthless efficiency at each of its acquisitions - is that it boosts profitability but diminishes organic growth by removing the infrastructure for experimentation. That model was clearly visible in Kraft Heinz's first full-year post-merger results. On a like-for-like basis excluding currencies, revenues were effectively flat at $27.5bn, but net income doubled to $3.6bn. However, once those cost savings have been made, the only way for a 3G company to grow is by gobbling up new businesses. General Mills, Campbell Soup and Kellogg's would all fit far more neatly into the Kraft Heinz structure than Unilever. So too, of course, would Kraft's former stablemates at Mondelez.

Adbrands Weekly Update 3rd Mar 2016: The newly combined Kraft Heinz Company reported first year revenues of $18.34bn, including around six months' contribution from Kraft. Proforma revenues, including a whole year of Kraft, would have been $27.5bn. However attributable net income for the enlarged group was actually lower than standalone Heinz the year before at $634m as a result of significantly higher financial expenses and tax charges. Operating income before finance expenses, tax and other items was up by two-thirds to $2.6bn.

Adbrands Weekly Update 22nd Jul 2015: BBH was the surprise winner of Heinz UK and all sauces across Europe. Incumbent AMV BBDO declined to defend the business because of the extended payment terms demanded by the newly merged, procurement-focused Kraft Heinz Company. BBH, it seems, wasn't so picky.


Subscribe to Adbrands.net and access the profile and website links


Brands & Analysis

See full profile

Management & Marketers

See full profile

Financials

See full profile

Background

Free for all users | see full profile for current activities: Despite its biggest brand today, Heinz started not with tomatoes, but with horseradish. In 1869 Henry John Heinz teamed up with a friend to form Heinz & Noble, selling his mother's recipe for grated horseradish. The business thrived for six years until an overabundance of the crop flooded the market and forced Heinz & Noble into bankruptcy. Henry Heinz returned the following year, backed by his brother Frederick, selling pickles, jellies and condiments. Heinz's particular skill was marketing. He invented the Heinz "pickle pin" badge for the 1893 Chicago World's Fair, and it soon became one of the most popular promotional pieces in the history of American business. (A symbolic pickle still features on many Heinz product labels in honour of the company's early successes). Three years later Heinz coined the slogan "57 Varieties" although his company actually sold more than 60 different products, because he thought 57 sounded a more interesting number. He also championed the international market, setting up a UK business in 1886, and sending salesmen to every inhabited continent by 1900. One of the company's smaller lines, at first at least, was a bottled sauce made from tomatoes. Heinz called this a "ketchup", borrowing a word which had actually originated in Asia for a sauce made from pickled fish. The term had been adopted in Britain in the early 18th century for anchovy or oyster sauce, was later used for mushroom sauces, as well as pickled tomato sauces in the US from the early 19th century. Gradually the ketchup grew to become the company's best-selling product by around 1914.

By the 1920s the company was under the control of Henry's son Howard. He built the company's first British factory in 1925, producing pickles and sauces, and from 1928, canned baked beans in tomato sauce. During the Great Depression, Heinz cut costs and introduced low-priced soups and foods. Business doubled despite the economy. After the Second War, the founder's grandson, Jack, took the company public and moved Heinz into television advertising. During the 1960s, under its first non-family CEO, Burt Gookin, the company began to build its portfolio through acquisitions - Star-Kist in 1963, Ore-Ida two years later. In 1969, Gookin appointed Tony O'Reilly, an Irish rugby star, to run the UK business. O'Reilly bought Weight Watchers in 1978, and went on to become worldwide CEO the following year. More acquisitions came in the 1990s, including New Zealand food company Wattie's in 1992, Borden's food service in 1994, Quaker Oats' pet food business in 1995 and Earth's Best baby food in 1996. In 1997 the company became the world's biggest tuna manufacturer with the purchase of Unilever's John West Foods. The ketchup portfolio was swelled by the addition of Polish brand Pudliszki the same year.

Also in 1996, Weight Watchers secured the services of Sarah, the Duchess of York, to promote its slimming club. "If I can do it, anyone can," claimed the Duchess of York, and US membership soared by 50% in response. In 1998 the group acquired German convenience meals business Sonnen Bassermann from Danone (later sold on again to Struik Foods) and sold its bakery products division to Diageo's Pillsbury for $178m. The company also launched Heinz Direct online, selling its products direct to consumers via the internet. Meanwhile, as Weight Watchers gained in popularity, the fit with the rest of the portfolio became increasingly uncomfortable. In 1999, the Weight Watchers slimming clubs business was sold for $735m to Invus, the US arm of private investment company Artal Luxembourg. Heinz retained the license for Weight Watchers frozen prepared meals, and reacquired a 6% stake in the classes for $14m. Also that year, the group made a number of small acquisitions, including a 20% stake in organic specialist Hain Foods for $100m (later sold), and a range of frozen foods from dwindling British cookie company United Biscuits, including Linda McCartney vegetarian meals, Jane Asher desserts and San Marco pizzas.

In 2000 introduced a kids' version of its cornerstone Tomato Ketchup, under the brandname EZ Squirt. The product was green instead red, with the addition of food colourings. The group pointed to research which suggested children would prefer their ketchup that colour instead of boring old tomato-coloured. The new brand enjoyed some success - additional colours (orange and purple) were introduced in 2001, while the green variant was launched in selected other territories (including the UK). It was eventually phased out in 2006. Also in 2000 Heinz attempted to increase its presence in the US baby food market by acquiring Milnot Holdings, whose subsidiaries include Beech-Nut Nutrition foods. The purchase was blocked by anti-trust regulators in 2001. Other acquisitions in 2001 included the Bordens Soups portfolio (including leading US pasta sauce Classico), Delimex frozen Mexican meals, and Anchor's Poppers frozen appetisers. At the end of the year the group sold a 51% stake in its Japanese operations to local company Kagome, the country's leading manufacturer of ketchup and vegetable juices under the Kagome and Yasai-Seikatsu brands.

Facing pressure from shareholders over the lack of growth, Heinz announced a major overhaul of its portfolio in 2001. Its North American pet food and pet snacks, US tuna, US private label and College Inn soups and infant feeding businesses were all transferred into Del Monte Foods, in a deal worth around $1.8bn. The enlarged Del Monte business was then spun off to shareholders. Instead Heinz focused its attention on "meal enhancers" (its ketchup, sauces and condiments), meals and snacks, including frozen food. See full profile for current activities


All rights reserved © Mind Advertising Ltd 1998-2017