Kraft Heinz shifts focus to growth and sustainability: ‘The company is entering a new era’

Cristina Kenz joined Kraft Heinz at the start of June. Reporting to zone president Rafael Oliveira, she will be responsible for setting central strategy, driving innovation and building capabilities across the company’s category, marketing, insight and R&D teams.

Her resume includes impressive stints with both Danone and PepsiCo.

At Danone, she was most recently general manager of marketing for Spain, vice president South Europe Dairy and an elected European board member. She also led the ‘reinvention’ of the Essential Dairy & Plant Based business, driving new approaches to innovation, portfolio optimisation and consumer communications.

Prior to this, Kenz spent nearly 13 years at PepsiCo, including a spell as global marketing officer for Lay’s when she led the brand’s ‘new global positioning and purpose’, launching Lay’s first-ever global integrated campaign.

This experience seems to have informed her priorities as she moves into her new role within the Kraft Heinz organisation.

“I would call out three key priorities,”​ Kenz told FoodNavigator. “Firstly, marketing, insights and innovation excellence; secondly, sustainability; and, thirdly, people wellbeing, both inside and outside of the company.”​

‘You can’t cost-cut your way to growth’

There should be no underestimating the task ahead.

Kraft Heinz was born of the 2015 merger between two industry stalwarts – Kraft Foods and HJ Heinz. Following the tried and tested route of the company’s new private equity owners, 3G Capital and Berkshire Hathaway, cost cutting and synergies were able to drive profitability, initially at least. But a relentless emphasis on cost and margin came at the expense of growth and the company has seen lacklustre top line trends for some time.

In 2019, the company booked a 2.2% drop in organic sales. The result, incoming CEO Miguel Patricio told shareholders, was ‘disappointing’.

However, Patricio also outlined a roadmap for delivering ‘best-in-class’ financials. This includes ‘transforming’ the company’s capabilities and ‘making necessary investments in brands’ based on ‘deep consumer insights’. The turnaround ‘will take time’, Patricio told the market, but Kraft Heinz expects ‘significant progress’ in 2020.

“The company is entering a new era. The new mandate under global CEO, Miguel Patricio, puts the consumer at the centre,”​ Kenz explained. “As he has clearly stated, you can’t cost cut your way into growth. It’s an amazing time to join this company.”​

Kenz believes that the period of intense cost-cutting has left Kraft Heinz in a better position to regain momentum through targeted investment.

“The cost cutting era has left us a big opportunity in marketing and as an agile, entrepreneurial company with a bunch of feisty people ready to truly engage with our consumers and regain growth,”​ she explained.

“​To fuel with the right investments will be key, a company that may have lost the ability to engage consumers and grow will ultimately die. As management we are fully aligned on reigniting the consumer and regain leadership in our strategic categories.”​

Turnaround time?

What will these investments look like? Kenz responded that it is ‘too soon’ to share that level of detail given that she only started work at the company earlier this month. However, she does have a broad-brushstroke vision of the levers she will pull to support growth.

“The focus will be in insights, innovation and brand building. However, first-of-all, I would like to get a clearer idea of where we have gaps and then ensure that both our capability and focus drives what we have to the max. As a second step, we’ll investigate which areas are in need of further funding.”​

Increasing spending will be done in a strategic way focusing on shorter-term return-on-investment as well as longer-term priorities, Kenz elaborated. “In general, when it comes to investment, I like to think in two speeds. The first one being very ROI driven to ensure that every cent spent reaps returns, and the second lever needs to focus on ensuring future growth. Reigniting a growth mindset and fueling a set up for success must factor in creating systems, insights, innovation investments, creative and media partners. Key bets not only need to be well funded but also enabled.”​

‘Hidden big opportunities’

With household brands like Heinz and Kraft in the portfolio, Kenz is optimistic about the company’s capacity to both re-engage with consumers in well developed markets and reach new households in emerging markets.

“We have emerging fast growing markets, like China, Brazil or Russia, and we also have big consolidated markets which are very well positioned to recapture the consumer and ignite significant growth, such as the UK,”​ she told us.

“We have amazing brands like Heinz that can be raised as a true powerful ‘Masterbrand’, nimble and very interesting local brands like Orlando in Spain or Plasmon in Italy or Quero in Brazil, and some amazing products that range from protein soups in Australia, to sauces in the East that could be leveraged across other markets. And… we have the unknown power of amazing superfoods like beans and tomatoes.”​

With powerhouse brands and the right strategic focus, Kenz is bullish on the company’s prospects to step up the pace internationally. And she isn’t afraid to shake things up: “I love making changes to big things. This how we can truly leap as a company and we’re lucky to have some hidden big opportunities at an International level.”​

Aligning with new consumer values

For some time, Kraft Heinz’s legacy brands have seemed slightly out-of-step with emerging consumer trends. Unlike many of its peers, the group has failed to focus on communicating its sourcing or sustainability stories. And while many of its products tick boxes like being plant-based, this selling point has not been leveraged to its full extent.

All this could be about to change, particularly in the wake of the coronavirus crisis.

“It’s hard to talk about consumers and companies, without touching on the fact that we are in the middle of the COVID turmoil. This crisis has accelerated some consumer attitudes that were already growing year-on-year. As a company we’ll reignite our sustainability and corporate social responsibility alongside strong innovation and brand growth,”​ Kenz revealed.

She believes that there is ‘huge potential’ in the company’s portfolio and categories to align with consumer trends. And, in particular, Kenz sees an exciting future for the Heinz brand internationally.

“I have fallen in love with the Heinz brand. It’s like a gentle sleeping giant with an amazing portfolio deeply rooted on the plant world, a powerful latent equity as a quality brand that brings farm to table. Its unique taste and the nutrition performance in the top categories makes it an amazing brand to align with the new consumer trends and values,”​ she enthused.

“Heinz accounts for more than half of the international sales and it is a natural driver of goodness. As a planet, we need green solutions that will deliver sustainable food systems. Across the international zone, Kraft Heinz is uniquely positioned to claim that ground.​

“We have a responsibility to feed the world, to drive nutrition and to do so with the planet in mind. And we can do all that… adding great taste to our lives.”​