Kraft Heinz: Our goal is to become global leaders in marketing

Kraft Heinz hailed “inventive” product innovation and marketing for being “key ingredients” in the company’s growth as it looks to ramp up marketing investment to maintain momentum.

Speaking on an investor call following its Q1 2021 results, chief executive Miguel Patricio said: “Our goal is to become global leaders in marketing and brand management. And that begins [by] shifting our culture to be bolder and more creative. This creativity should allow us to accelerate our advantage in future quarters.”

He highlighted “inventive” marketing campaigns, such as the activity with Heinz and Weetabix in the UK, which opened a “national conversation” gaining 2 billion impressions and boosting brand equity by six points, as well product innovations like lactose-free Philadelphia for being key contributors to growth.

One way the company is looking to improve creativity and support marketing internally is through the launch of its ACE Awards to celebrate “best-in-class marketing” in-house.

“Here we recognise and share the 2020 achievements of our incredibly talented Kraft Heinz marketers and its partners. We’ve brought in external advisors, world-class marketers, who have won or served as judges at Cannes. [There we] celebrated our best creative work in 2020, but also served as an inspiration for our future,” said Patricio.

US zone president Carlos Abrams-Rivera said the company began plans to modernise its portfolio and its approach to marketing at the beginning of 2021.

“We are also driving greater creativity in marketing [in the US]. As we ramp up overall investment levels and the quality of those investments, especially to grow and energise platforms,” Abrams-Rivera said.

Last year, Patricio said the company was pondering whether to increase marketing investment to gain momentum despite marketing not having “substantial growth”.

Rise of ecommerce

Kraft Heinz says it saw its ecommerce operations grow faster than its packaged food competitors and claims it has the “highest penetration among peers”, with a penetration rate of 15.5% compared to the peer average of 7.6%.

“I am particularly proud to see recent data showing that our ecommerce household penetration has increased more than packaged food competitors and that we now have the highest penetration amongst our peers,” he added.

“We continue to see very strong net sales growth and sustainable, fundamental improvements in our ecommerce business. And we’re not done, by piloting a more agile route to market and operating seamlessly across channels. We are bringing full consumer solutions online and making progress against our goal to be accessible and available to all families everywhere.”

Patricio said the company has made a “solid start” to the year and expects Kraft Heinz to continue driving top and bottom-line growth.

The business saw net sales increase by 3.9% to $6.4bn in Q1 this year, while gross profit was up by 18.5% to $2.2bn.

“Our 2021 plans are already delivering some powerful early wins, which we can build on as the year progresses. The strong liquidity we built last year and the actions we are taking to improve our business, which is portfolio management, should continue to fuel our growth going forward,” added Patricio.

In 2019, the FCMG giant posted a huge loss of $12.6bn in its Q4 results, wiping 27% off its share price. Marketing Week columnist Mark Ritson said then, the company was suffering from self-inflicted wounds from underinvesting in its brands and failing to adapt its portfolio to modern tastes.