Kraft Heinz

The Kraft Heinz Company(KHC), commonly known asKraft Heinz(/ˈkræftˈhaɪnz/), is an American multinational food company formed by the merger ofKraft Foods Group, Inc.andthe H.J. Heinz Companyco-headquartered inChicagoandPittsburgh.Kraft Heinz is the third-largestfood and beveragecompany in North America and the fifth-largest in the world with over $26.0 billion in annual sales as of 2021.Its sister company,Mondelez International, was split fromKraft Foods Inc.in 2012, alongside Kraft before its merger with Heinz. Mondelez holds the old Kraft Foods' snack brands while Kraft Heinz holds the grocery and food processing brands. In addition to Kraft and Heinz, over 20 other brands are part of the company's profile, includingBoca Burger,Gevalia,Grey Poupon,Oscar Mayer,Philadelphia Cream Cheese, Primal Kitchen, andWattie's, eight of which have total individual sales of over $1 billion.Kraft Heinz ranked 114th in the 2018Fortune500list of the largest United States corporations based on 2017 total revenue.
The boards of both companies agreed to the merger of Kraft Foods and H.J. Heinz, with approval by shareholders and regulatory authorities in early 2015.The new Kraft Heinz Company became the world's fifth-largest food and beverage companyand the third-largest in the United States.The Kraft Heinz co-headquarters are in Chicago at theAon Centerand in Pittsburgh atPPG Place, with other offices across the United States, Canada, South America, Europe, Asia, and Australia.The merger was completed on July 2, 2015.
The merger in 2015 did not immediately affect thenaming rightstoHeinz Fieldin Pittsburgh, home of thePittsburgh Steelers.In July 2022 reports leaked that the company did not renew the rights, which Heinz initially acquired in 2001.
On February 17, 2017, it was reported that Kraft Heinz Co. had made a $143 billion approach to take over the British-Dutch multinationalUnilever, a significantly larger competitor with 126,000 more employees and £24bn larger revenue than Kraft Heinz.Unilever declined the initial proposal.The takeover was subsequently abandoned on February 19 soon after UK Prime MinisterTheresa Mayhad ordered regulators to examine the potential deal.
On October 19, 2017, Kraft Heinz announced that it was acquiringCerebos Pacific, including theSaxasalt,Gregg's, andBistobrands, fromSuntory.On March 9, 2018, New Zealand's Commerce Commission approved the purchase, on the condition that they sell the licenses for Gregg's brand of sauces and the F. Whitlock Worcestershire sauce brand due to competition concerns.
In May 2018, Kraft Heinz launched Springboard Brands, a business focused on growing organic, natural, and "super-premium" food brands.Later that year, it was announced Kraft Heinz would acquire thePrimal Kitchenbrand as part of the company's Springboard Incubator.The $200 million deal was completed in early 2019 and was expected to generate $50 million in new annual revenue.
On October 24, 2018, Kraft Heinz announced that it was selling its Indian nutritional beverage assets, includingComplanand energy drink Glucon-D toZydus Wellness.The sale was completed on January 30, 2019.
In April 2019, it was announcedMiguel Patricio, former Chief Marketing Officer ofInBevwould replace Bernardo Hees as CEO of Kraft Heinz.Patricio took position of CEO in late June 2019 andAlex Behringremained chairman of the company.Later that year,Paulo Basilioreturned to his role at Chief Financial Officer and Corrado Azzarita assumed the position of Chief Information Officer.Todd Kaplan has been named chief marketing officer of North America at Kraft Heinz.
In June 2019, Kraft Heinz reached a milestone in achieving a 100 percentCorporate Equality Indexscore from theHuman Rights Campaign.The score recognized the company for itsLGBTQinclusion efforts and becoming a leader in the area amongfood CPGcompanies. On July 2, 2019, Kraft Heinz sold its Canadian natural cheese business, including the Cracker Barrel, P’tit Quebec, and aMOOza! brands toParmalatfor C$1.62 billion.
In September 2020, Kraft Heinz reached a deal to sell part of its cheese business to French multinationaldairy productcorporationLactalisfor $3.2 billion.The sale included the Breakstone's, Knudsen,Polly-O, Athenos,Hoffman's, andCracker Barrelcheese brands for the United States, andCheez Whizoutside of North America.Kraft Heinz then partnered with Lactalis to manufacture Kraft and Velveeta cheeses. On November 10, 2021, theU.S. Justice Departmentapproved the acquisition on the condition that they divest the Athenos and Polly-O businesses.The sale was completed on November 29.The divestiture of Athenos to Emmi Roth was completed on December 1,while the divestiture of Polly-O to BelGioiso was completed on December 3.
On September 15, 2020, Kraft Heinz announced its new Strategic Transformation Plan, including a new company purpose, "Let's Make Life Delicious" and an all-new vision, "To sustainably grow by delighting more consumers globally."The next day Kraft Heinz also released its updated 2020 Environmental Social Governance (ESG) report with goals to make 100% of Kraft Heinz product packaging recyclable, reusable, or compostable by 2025 and plans to sustainably source 100 percent ofHeinz Ketchuptomatoes by 2025.
On February 11, 2021, Kraft Heinz announced its Q4 2020 and full-year results, resulting in 6.2 percent increased sales and over $26 billion in revenue.The same day, Kraft Heinz announced their plans to sell its nuts business, including thePlantersbrand toHormelfor $3.35 billion.The transaction was completed on June 7.
In September 2021, Kraft Heinz announced that Hemmer, a Brazilian company focused on condiments and sauces, was being acquired for an undisclosed amount.This acquisition followed the recent agreement to purchase Assan Foods – a Turkish company focused on sauces – belonging to Kibar Holding, for approximately $100 million.
On January 19, 2022, Kraft Heinz announced that it had completed its acquisition of an 85% stake in Germany-basedJust Spices GmbH. Launched in 2014, Just Spices is a start-up with approximately €60 million annual sales. Its 170-plus product portfolio includes spice blends, salad dressings, easy-to-prepare "In Minutes" blends, and organic offerings for diverse meal occasions ranging from breakfast and light snacks to salads and baking, with a broad range of savory, sweet, classic, and exotic flavors. The proposed deal was first announced on Dec. 10, 2021.
As of 2023, a partial list of global brands included in the Kraft Heinz portfolio:
Kraft and Heinz:
Other:
For the fiscal year 2017, Kraft Heinz reported earnings ofUS$11.0 billion, with annual revenue ofUS$26.2 billion, a decline of 0.6% over the previous fiscal cycle. Kraft Heinz's shares traded at over $61 per share, and its market capitalization was valued at overUS$136 billion in September 2018.
In February 2019, shares in Kraft Heinz fell to a record low of under $35 after the company reported a $10.2bn loss for the previous year as the company announced that it would take a $15.4 billion writedown of its Kraft and Oscar Mayer brands, cut its dividend, and acknowledged that theU.S. Securities and Exchange Commissionhad opened a probe into its accounting practices.In August 2019, Kraft Heinz announced a further $1.22 billion in writedowns,as well as the return of its former CFO, Paulo Basilio, who held the position until 2017, to replace David Knopf, saying that it wanted a "seasoned veteran" following a series of accounting errors.
On February 21, 2019, Kraft Heinz reported that they received aSecurities and Exchange Commission (SEC)subpoenain October that aimed to look into the company's accounting policies and internal controls.Kraft Heinz also announced that they cut theirdividendfrom 62.5 cents a share to 40 cents.The company also announced agoodwillimpairment chargethat wrote down the value of the company'sKraftandOscar Mayerbrands of $15.4 billion in the fourth quarter, which resulted in a net loss of $12.61 billion.The all-resulting news made the company's stock crash more than 20% in after-hours trading.The stock plunge resulted inBerkshire Hathaway, the largest stockowner, recording awrite downof $3 billion and a stock value loss of $4.3 billion just a day before Berkshire Hathaway's quarterly earnings and annual report to investors.
In September 2020, Kraft Heinz announced its new enterprise strategy, including plans to cut $2 billion in costs over five years, resulting in an estimated generation of 4% to 6% adjusted earnings per share growth.The announcement resulted in multiple stock upgrades by CFRA and Guggenheim due to the renewed positive financial outlook of the company.
In September 2021, Kraft Heinz was fined $62m to settle theU.S. Securities and Exchange Commissionprobe into an improper claim of $200m incost savings.The $200 million in "bogus cost savings" (reportedly from merger) forced the company to restate its financial results for the years 2015 through 2018.
In 2017, the claim that the Kraft Parmesan Cheese label was misleading was rejected by judges. The label reads "Kraft 100% Grated Parmesan Cheese". It was argued that a "reasonable consumer" would know the product could not be 100% cheese, as any dairy product degrades quickly without preservatives.
On December 1, 2023, a federal jury in Illinois awarded $17.8 million to several large food companies, including Kraft Heinz, in a lawsuit againstCal-Maine Foods, Inc. and others over allegations of egg price fixing. Cal-Maine Foods, contesting the verdict, insists on its innocence and the absence of wrongdoing in its business practices.