Kraft Heinz

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

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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.

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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 Update:

Adbrands Daily Update 12th Aug 2019: Kraft Heinz wrote down the value of its brands for the second time in six months, reflecting continuing poor performance for the first half of 2019. "The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward," said CEO Miguel Patricio. "We have significant work ahead of us to set our strategic priorities and change the trajectory of our business." The company took impairments of another $1.2bn on top of the shock $15bn write-off in February. The company's stock price has tumbled by almost half since then. "We've been too focused on the present and literally on firefighting," Patricio told investors. "We need to work on our competencies for the future." Net sales fell 5% in the first half to $12.4bn while net income more than halved to $854m. The organic decline excluding currencies and disposals was -2.0% globally, with the worst performance in the EMEA region and the US.

Adbrands Social Media 17th Jun 2019: "Ed's Heinz Ad". Who needs social media influencers when the world's most successful recording artist already professes an undying love for your product? Ed Sheeran even has the Heinz Ketchup logo tattooed on his arm, and it's a sign of just what a down-to-earth guy he still is that he actually approached Kraft Heinz off his own bat with a proposal for an ad for his favourite sauce. Who in their right mind is going to turn down an offer like that? Here it is, and it's pretty damn great. It's hard to know how much is pure Ed and how much the advertising craft of agency David, but the finished results are delightful. Nice one, Ed! A new career awaits if you ever get fed up with the music business.

Adbrands Daily Update 6th May 2019: Chief marketing officer Eduardo Luz is to follow CEO Bernardo Hees out of the exit at troubled Kraft Heinz Company. He will be replaced on an interim basis by Adam Butler, also president of beverages, snacks & desserts. The company's head of strategic projects is also departing. At the same time, the company said it would restate financial results for the past two years in the light of an internal investigation that has uncovered misconduct by members of the procurement department. The corrections are not material and are expected to alter previously reported profits by less than 1% per year.

Adbrands Daily Update 23rd Apr 2019: Kraft Heinz announced the abrupt departure of CEO Bernardo Hees in the wake of the profit warning and asset write-off announced in February. He will be replaced from the end of June by Miguel Patricio, another 3G Capital stalwart, former CMO of Anheuser-Busch InBev and current head of special global projects for the brewer.

Adbrands Social Media 15th Apr 2019: "True Love". There's both sweet and sad in this lovely campaign for Heinz Ketchup in Canada from Toronto independent Rethink. That's the trouble with anthropomorphic food: it's a bad idea to get too attached to any particular edible, because it won't be too long before it gets sliced or diced. Still, if you're gonna go, there are worse ways than being smothered in Heinz Tomato Ketchup...

More on Kraft Heinz Company from Adbrands Weekly Update


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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


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