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:
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|Boston Market HomeStyle||Jack Daniel's Grilling Sauce|
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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...
Adbrands Social Media 8th Apr 2019: "150 Years of Clean Plates". Finally an official UK release for a joyful campaign from BBH London to celebrate the 150th anniversary of Heinz Ketchup. The ad has actually been running in cut-down form across mainland Europe for almost a month. We wonder why it took so long to get here. It's a wonderfully entertaining collection of overhead vignettes, each one deliciously well-conceived. We have to say those early views look rather older than 150 years; more like 250 years. Still, we're not complaining. The whole film is a delight.
Adbrands Daily Update 22nd Feb 2019: Kraft Heinz shocked the markets with lower than expected sales for the final quarter, a massive loss and also the announcement that the company is under investigation by the SEC over procurement policies. The revenues miss wasn't too significant, but analysts were alarmed by a $15.4bn impairment against several core brands including Kraft and Oscar Mayer. That turned 2017's $11bn profit into a net loss for 2018 of $10.3bn. Topline for the year edged up less than 1% to $26.3bn. Even without those impairment charges operating income was down 6% year-on-year. The grim numbers reinforce growing concerns about the strategy of acquisition-hungry investment groups 3G Capital - which is Kraft Heinz' controlling shareholder - and JAB Holdings, whose Coty business is facing similar challenges. Their business model relies on a never-ending stream of new acquisitions to introduce new revenue streams, but there's only so much that can be done to improve performance once all costs and expenses have been stripped to the bone. Nor is there sufficient cash left to invest in innovation and expansion of existing brands. Kraft's share price plunged by 20% in over-night trading to its lowest level since the business was spun out of what is now Mondelez.
Adbrands Daily Update 3rd Dec 2018: Kraft Heinz pushed into less conventional food segments with a deal to acquire Primal Kitchen, a US maker of paleo-based protein-heavy low-carb sauces and salad dressings. Deal price was $200m, around four times Primal's annual sales.
Adbrands Weekly Update 8th Nov 2018: With profits already on the slide in 3Q, Kraft Heinz might be tempted to start breaking itself up again in order to deliver bottom-line growth. The company agreed this week to sell a collection of natural cheese brands in Canada to Parmalat for around $1.2bn, a little under three times their annual sales. Brands being transferred include Cracker Barrel, P’tit Quebec and aMOOza! Kraft Heinz will continue to manufacture and market processed brands such as Philadelphia, Cheez Whiz and Kraft Singles in Canada. The deal followed weaker than expected 3Q results in which profits plunged by a third despite an increase in revenues.
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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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