BOCA RATON, FLA. — Kraft Heinz Co. executives see innovation as its chief growth driver in North America and are targeting $2 billion in incremental sales by 2027. To achieve that growth the company will focus on three trends — exploration and authenticity; quick with quality; and holistic wellness.
“US retail is the core of our business,” said Miguel Patricio, chairman and chief executive officer, during a Feb. 21 presentation at the Consumer Analyst Group of New York conference taking place in Boca Raton, Fla., Feb. 21 – 24. “Growth platforms within US retail represent about 35% of our revenue and is a place we absolutely must win.”
Carlos A. Abrams-Rivera, president of North America, said the company finds itself at an “inflection point” after spending the past few years renovating Kraft Heinz’s entire product portfolio. Now management is focused on solving consumer “pain points” with innovation.
“We follow a brand design to value approach with a focus on the consumer first,” he said. “We eliminate product attributes that don't matter to them, and we add attributes that are important to them. We then connect with consumers with better quality, better presentation and better marketing.”
Each trend highlighted by Abrams-Rivera may be considered a platform populated by innovation initiatives. Within exploration and authenticity, for example, will be a focus on flavor and customization through personalized sauces.
“In personalized sauces, we are building on the growing consumer trend of customization with the strength of our brands,” Abrams-Rivera said.
Kraft Heinz completed its acquisition of Just Spices, Dusseldorf, Germany, a manufacturer of spices, spice blends, salad dressings and meal kits. Approximately 70% of the company’s sales prior to the acquisition were from direct-to-consumer (DTC) transactions. Kraft Heinz is now launching the business in the US market through the DTC channel and then will later expand the brand into retail, Abrams-Rivera said.
Rounding out the exploration and authenticity platform will be a greater emphasis on Mexican cuisine.
“In our Mexican strategy, we will offer options for consumers from end to end across sauces, snacks, meals,” Abrams-Rivera said. “For Delimex, in particular, we are collaborating with suppliers to facilitate innovation, ideation and development. This strategy is bringing commercialization that previously had taken three years down to six months.”
The product development process led to reformulated Delimex taquitos with “improved quality” and double the filling, Abrams-Rivera said.
Convenience underpins the quick with quality platform. Two initiatives underway include “Crisp from the Microwave” and “HomeBake,” which is a form of modular cooking.
“First, what we call crisp,” Abrams-Rivera said. “Now, how many of you have put something in the microwave, then you pull it out and think it's a hot mess? So, we actually have solved that pain point.”
A product highlighted as part of the Crisp from the Microwave program was a grilled cheese sandwich, but Abrams-Rivera said the technology supporting the capability is expandable into many categories.
HomeBake will allow consumers to cook main dishes, side dishes and vegetable-based dishes at once.
“Think about all the dishes cooked together in the same oven for 30 minutes with just the push of a button,” he said. “All of them, each of those dishes, will come out together and look exactly and taste just like homemade. That’s the magic that we have with HomeBake. … We are using an ownable technology platform that delivers its new to the world taste and convenience.”
HomeBake product examples shown during Abrams-Rivera’s presentation included a pulled pork with barbecue sauce, cheesy broccoli and macaroni and cheese. The products come in a cooking tray wrapped with a sleeve that promotes that each product may be cooked at 425° F for 30 minutes.
Scaling Primal Kitchen, a business acquired in 2019, and expanding the use of NotCo’s artificial intelligence platform to develop plant-based foods are two components of the holistic wellness platform.
“We know consumers are looking for food to enhance their health and improve the physical wellness,” Abrams-Rivera said. “So, here, we are focused on simple ingredients that taste delicious. First is Primal Kitchen. It’s the best (better-) for-you option in many pantry staples. And with Kraft Heinz’s scale, we can expand the business with the economics that make sense.
Regarding NotCo, he said the platform allows the company to innovate quickly and deliver product performance. Not Mayo and Not Cheese were two examples highlighted in Abrams-Rivera’s presentation.
Among the innovations discussed, Abrams-Rivera said the HomeBake and Primal Kitchen items in development are ready to scale. The company is still testing and learning about the Crisp from the Microwave and NotCo initiatives.
“Repeat for HomeBake consumers that try the product is 92%,” he said. “Trial and repeat are beating all benchmarks set by (the) top frozen meal launches of the past decade.”