Kraft Heinz boosts marketing spend by 30%, consolidates 55 categories into 6

Kraft Heinz will be increasing its marketing and advertising spend by 30%. This comes as the company adopts a new strategy, operating model and key initiatives in efforts to transform its operations. According to a press release, this signals a fundamental shift in its approach to growing its brands and its business at a global scale. 

Miguel Patricio, chief executive officer of The Kraft Heinz Company said it is placing the consumer at the center of everything it does moving forward. It will also be strengthening its partnerships, and generating fuel that funds growth investments such as its increase in marketing spend. Marketing has reached out to Kraft Heinz for additional information about its marketing strategies.

As part of the company's transformation, Kraft Heinz will be consolidating its 55 categories into six consumer-driven platforms to drive growth. These platforms are namely:

• Taste elevation: products that enhance taste, flavour and texture of food
• Easy meals made better: convenient foods that minimise trade-offs at mealtime
• Real food snacking: nutrition-rich, tasty, convenient clean food experiences
• Fast fresh meals: products that help consumers make fresh, easy, prepared or assembled meals
• Easy indulgent desserts: sweet and indulgent treats that bring simple joy to every day
• Flavourful hydration: hydration across kids’ beverages and beverage mixes

“I am extremely confident that unlocking the power of scale with agility, combined with our new operating model, will return Kraft Heinz to consistent and sustainable growth,” Patricio said, adding that the new changes will create a clear path to rebuilding Kraft Heinz into the "industry leader it has the potential to become".

Additionally, Kraft Heinz will be selling its cheese businesses to a US affiliate of Groupe Lactalis for US$3.2 billion. The transaction includes Kraft Heinz’s natural, grated, cultured and specialty cheese businesses in the US, grated cheese business in Canada, and the entire international cheese business outside these two countries, including the following brands: Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s, and outside the US and Canada only, Cheez Whiz. The cheese businesses being sold contributed approximately US$1.8 billion to Kraft Heinz’s net sales for the 12 months which ended on 27 June. 

According to Patricio, the transaction will enable Kraft Heinz to build sustainable competitive advantage in businesses where it has stronger brand equity, greater growth prospects and can use its manufacturing scale and consumer-based platforms approach.

Kraft Heinz's latest financial reports showed that the company is witnessing growth during this period. The company reported a net sales growth of 3.8%, with a US$6.6 billion revenue. It also had an organic net sales growth of 7.4% compared to a year ago, which the company attributed to strong retail performance across all business segments.

Kraft Heinz has most recently appointed two agencies to support its media planning and buying around the world after four media agencies participated in its eight-month global review. It picked Dentsu Aegis Network’s Carat to handle Kraft Heinz’s Canada and international zones. Carat also will take the lead agency role in developing global projects and capabilities with the company’s Amsterdam-based global media team.

While the incumbent Starcom Worldwide has handled all the company’s global media buying and planning since 2018, Kraft Heinz is also retaining Starcom as its agency of record within the US zone, the company’s largest business segment.

Separately, Kraft Heinz unveiled a new branding for its iconic Kraft Mac & Cheese Dinner in August, as part of its efforts to stay relevant with parents struggling with kids who were picky eaters in the morning. The packaging is not getting a full redesign, as the company is simply swapping “dinner”, with “breakfast” to encourage Americans to start their day with neon orange cheesy noodles.

(Photo courtesy: 123RF)

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