Interesting case study underway, as Kraft Heinz, the world’s 5th largest food and beverage conglomerate tries to recover from its lack luster merger in 2015.
They’ve been restructuring, reformulating, and repositioning their (highly processed) portfolio to be more “on trend” with healthier products and innovative marketing.
Source: CNN video
‘“Kraft-Heinz’s growth strategy involves divesting brands in categories that are crowded with private-label competition, piloting better-for-you formulations and spotlighting its legacy brands with marketing that reintroduces them in a way that gets noticed”, said CEO Miguel Patricio.’
They are prioritizing 8 legacy brands (=1/2 their sales), and divested those with high Private Label competition, notably Cheese and Nuts (Planters). While these are indeed “healthier” categories, they are also very commoditized, allowing Private Label strength and weak brand margins.
🍔 To focus on Health, they are
Reformulating legacy brands, e.g., Heinz’s No Sugar Added Ketchup, reduced-sugar Capri Sun and “Kraft Mac and Cheese is made without artificial flavors, dyes or preservatives and comes in gluten-free and whole grain varieties.”
Partnering with other companies, e.g., NotCo, (makes plant-based dairy and protein); they launched their first joint venture product, plant-based American cheese slices, in a test market in October.
📽 They’re also trying more creative advertising with “focus on the processed [brand] icons, putting them front and center in flashy, even goofy, marketing campaigns that have captured the attention of social media”
💲 In Q3 2022, net sales grew +2.9% vs 2021. On the right track, but still a ways to go.
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