Kraft-Heinz focuses on building value through packaging, external partnerships

By Deniz Ataman

- Last updated on GMT

Image source: Getty/Dan Dalton
Image source: Getty/Dan Dalton

Related tags Kraft heinz Packaging retail channels AI

In the wake of Kraft-Heinz's earning results, the company reported a 3.5 percentage point increase in its stocks with double digit growth in emerging markets. Carlos Abrams-Rivera, incoming CEO, Kraft-Heinz, discussed during CNBC’s Evolve Global Summit how different packaging formats across retail channels meet consumer demands for value while accelerating its operations through external partnerships is strengthening the company's positioning.

With consumers looking for value across retail channels, the company is focused on offering various packaging formats to reach "the lower price per unit, price per serving,” he said.

From club and discount channels to grocery stores, the company is “looking to make sure we have the right products” in each type of environment to balance price point and value, while giving consumers more accessibility to its brands.

“Consumers are making two choices: one, they’re looking for more of the lower price points overall and [two], they’re also making some choices on the type of grocery stores they go to,” he explained.

Abrams-Rivera cited that increasing specific brands in club channels, like its Kraft Mac and Cheese, and increasing the number of SKUs in discount channels will ensure “that we are driving both of those consumers who are looking for value.”

For example, the company offers its Heinz ketchup brand in different size based on its retail channel to ensure accessibility without compromising quality—

“We can have anywhere from a 32 ounce product in a club store…to an eight ounce product in a dollar store…to a 20 or 30 ounce [in a grocery store]. The idea of us having different kinds of formats for the consumer…started with us understanding what that shopper is looking for in that particular outlet, so we can provide a better solution,” he explained.

Consumers in each outlet are shopping for different value propositions, he added, “So our consumer who walks into a Sam’s or Costco is looking for a certain type of solution that is very different than when they walk into a Target…or a dollar store.”

Abrams-Rivera emphasized the company’s investment on marketing throughout retail channels “so that no matter where consumers are shopping, they know that this is a brand worth paying for.”

Investing in tech, building external partnerships for more product solutions

While Kraft-Heinz has moved away from its 2019 strategy of offering promos and discounts, Abrams-Rivera explained that instead the company is investing in tech “to make sure we are investing in promotions during the right time” and “provide a solution for what consumers are looking for.”

Its 360 CRISP platform, which creates a quicker browning and crisping experience for its recent launch of microwavable grilled cheese, is an example of the company's investment in IP to drive more in-house product solutions.

The company also implements AI in 19 out of 34 areas within its North American sector, reducing logistics time by 35%, Abrams-Rivera reported.

“[AI] allows us to ingest data directly from the customers, it improves our service, it improves the logistics time for us to get the product to them—and it can minimize all the bottlenecks that we’re having in the logistics. So it was not enough to just get an order from a customer, but understanding where the customer's coming from, what’s happening between our facilities and their stores that could potentially delay the order, and how we actually work around those things, from weather patterns to traffic situations,” he elaborated.

He also credits the company’s growth to external partnerships with Microsoft to help manage digital control towers in manufacturing facilities and with NotCo for developing a plant-based Kraft NotCheese Slices​.

“I think Kraft Heinz was very much an internally focused company, we are much more externally focused now. Some of the great partnerships we have done whether it’s in Microsoft…with joint ventures with NotCo…those are things that we do now. When there’s opportunity with the strategy, how do we bring the right partner with us to accelerate our momentum?” Abrams-Rivera added.


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