The Kraft Heinz Company
TypePublic
IndustryFood
FoundedJuly 2, 2015 (2015-07-02)
Headquarters
Chicago, Illinois and Pittsburgh, Pennsylvania
,
U.S.
Area served
Worldwide
Key people
ProductsBeverages
Convenience foods
Snack foods
Foodservice
RevenueIncrease US$26.485 billion (2022)
Increase US$3.634 billion (2022)
Increase US$2.368 billion (2022)
Total assetsDecrease US$90.513 billion (2022)
Total equityDecrease US$48.830 billion (2022)
Owners
Number of employees
38,757[3] (2020)
DivisionsKraft Foods
H.J. Heinz Company
Websitewww.kraftheinzcompany.com
Footnotes / references
[4]

The Kraft Heinz Company (KHC), commonly known as Kraft Heinz (/ˈkræft ˈhaɪnz/), is an American multinational food company formed by the merger of Kraft Foods and H.J. Heinz Company co-headquartered in Chicago and Pittsburgh.[5][6] Kraft Heinz is the third-largest food and beverage company in North America and the fifth-largest in the world with over $26.0 billion in annual sales as of 2021.[7][8]

In addition to Kraft and Heinz, over 20 other brands are part of the company's profile including Boca Burger, Gevalia, Grey Poupon, Oscar Mayer, Philadelphia Cream Cheese, Primal Kitchen, and Wattie's, eight of which have total individual sales of over $1 billion.[9] Kraft Heinz ranked 114th in the 2018 Fortune 500 list of the largest United States corporations based on 2017 total revenue.[10]

History

Fltr: James Lewis Kraft (1874–1953) and Henry John Heinz (1844–1919), the founders of the companies that merged into today's The Kraft Heinz Company

The merger of Kraft Foods and H.J. Heinz was agreed to by the boards of both companies, with approval by shareholders and regulatory authorities in early 2015.[11][12] The new Kraft Heinz Company became the world's fifth-largest food and beverage company[13] and the third-largest in the United States.[11][14] The Kraft Heinz co-headquarters are in Chicago at the Aon Center and in Pittsburgh at PPG Place, with other offices across the United States, Canada, South America, Europe, Asia, and Australia.[15] The merger was completed on July 2, 2015.[16]

The merger in 2015 did not immediately affect the naming rights to Heinz Field in Pittsburgh, home of the Pittsburgh Steelers.[17] In July 2022 reports leaked that the company did not renew the rights, which Heinz initially acquired in 2001.[18]

On February 17, 2017, it was reported that Kraft Heinz Co. had made a $143 billion approach to take over the British-Dutch multinational Unilever, a significantly larger competitor with 126,000 more employees and £24bn larger revenue than Kraft Heinz.[19] Unilever declined the initial proposal.[20] The takeover was subsequently abandoned on February 19 soon after UK Prime Minister Theresa May had ordered regulators to examine the potential deal.[19]

On October 19, 2017, Kraft Heinz announced that it was acquiring Cerebos Pacific, including the Saxa salt, Gregg's, and Bisto brands, from Suntory.[21] 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.[22]

In May 2018, Kraft Heinz launched Springboard Brands, a business focused on growing organic, natural, and "super-premium" food brands.[23][24] Later that year, it was announced Kraft Heinz would acquire the Primal Kitchen brand as part of the company's Springboard Incubator.[25] 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, including Complan and energy drink Glucon-D to Zydus Wellness.[26] The sale was completed on January 30, 2019.[27]

In April 2019, it was announced Miguel Patricio, former Chief Marketing Officer of InBev would replace Bernardo Hees as CEO of Kraft Heinz.[28] Patricio took position of CEO in late June 2019 and Alex Behring remained chairman of the company.[29] Later that year, Paulo Basilio returned to his role at Chief Financial Officer and Corrado Azzarita assumed the position of Chief Information Officer.[30][31]

In June 2019, Kraft Heinz reached a milestone in achieving a 100 percent Corporate Equality Index score from the Human Rights Campaign.[32] The score recognized the company for its LGBTQ inclusion efforts and becoming a leader in the area among food CPG companies. On July 2, 2019, Kraft Heinz sold its Canadian natural cheese business, including the Cracker Barrel, P’tit Quebec and aMOOza! brands to Parmalat for C$1.62 billion.[33]

In September 2020, Kraft Heinz reached a deal to sell part of its cheese business to French multinational dairy products corporation Lactalis for $3.2 billion.[34][35] The sale included the Breakstone's, Knudsen, Polly-O, Athenos, Hoffman's, and Cracker Barrel cheese brands for the United States, and Cheez Whiz outside of North America.[36] Kraft Heinz then partnered with Lactalis to manufacture Kraft and Velveeta cheeses. On November 10, 2021, the U.S. Justice Department approved the acquisition on the condition that they divest the Athenos and Polly-O businesses.[37] The sale was completed on November 29.[38] The divestiture of Athenos to Emmi Roth was completed on December 1,[39] while the divestiture of Polly-O to BelGioiso was completed on December 3.[40]

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."[41] 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 of Heinz Ketchup tomatoes by 2025.[42][43]

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.[44] The same day, Kraft Heinz announced their plans to sell its nuts business, including the Planters brand to Hormel for $3.35 billion.[45] The transaction was completed on June 7.[46]

In September 2021, Kraft Heinz announced that Hemmer, a Brazilian company focused on condiments and sauces, was being acquired for an undisclosed amount.[47] This acquisition followed the recent agreement to purchase Assan Foods – a Turkish company focused on sauces – belonging to Kibar Holding, for approximately $100 million.[48]

On January 19, 2022, Kraft Heinz announced that it had completed its acquisition of an 85% stake in Germany-based Just Spices GmbH. Launched in 2014, Just Spices is a start-up with annual sales of approximately €60 million. 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.[49]

On September 21, 2023, Kraft Heinz announced that it had signed MoU with Gujarat Government (In India) to start first Global Capability Center (GCC) in Ahmedabad.

Brands

As of 2023, a partial list of global brands included in the Kraft Heinz portfolio:[50]

Kraft and Heinz:

Other:

Finance

For the fiscal year 2017, Kraft Heinz reported earnings of US$11.0 billion, with an annual revenue of US$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 over US$136 billion in September 2018.[52]

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 write-down of its Kraft and Oscar Mayer brands, cut its dividend, and acknowledged that the U.S. Securities and Exchange Commission had opened a probe into its accounting practices.[53] In August 2019, Kraft Heinz announced a further $1.22 billion in write-downs,[54] 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.[55]

On February 21, 2019, Kraft Heinz reported that they received a Securities and Exchange Commission (SEC) subponea in October that aimed to look into the company's accounting policies and internal controls.[56] Kraft Heinz also announced that they slashed their dividend from 62.5 cents a share to 40 cents.[56] The company also announced a goodwill impairment charge that wrote down the value of the company's Kraft and Oscar Mayer brands of $15.4 billion in the fourth quarter, which resulted in a net loss of $12.61 billion.[57] The all-resulting news made the company's stock crash more than 20% in after-hours trading.[57] The stock plunge resulted in Berkshire Hathaway, the largest stockowner, recording a write down of $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.[58][59]

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.[60] The announcement resulted in multiple stock upgrades by CFRA and Guggenheim due to the renewed positive financial outlook of the company.[61]

In September 2021, Kraft Heinz was fined $62m to settle the U.S. Securities and Exchange Commission probe into an improper claim of $200m in cost savings.[62][63] The $200 million in "bogus cost savings" (reportedly from merger) forced the company to restate its financial results for the years 2015 through 2018.[64]

Year Revenue
in mil. USD-$		 Net income
in mil. USD-$		 Price per Share
in USD-$		 Employees
2010 17,797 3,534
2011 18,576 1,775
2012 18,271 1,637
2013 11,529 1,013
2014 10,922 −63
2015 18,338 −266 77.01 42,000
2016 26,487 3,452 81.91 41,000
2017 26,232 10,999 61.75 39,000
2018 26,300 −10,200
2019 24,977 1,935
2020 26,185 1,032 34.66 38,757
2021[65] 26,040 1,020
2022[4] 26,485 2,368

Lawsuits

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 that the product could not be 100% cheese, as any dairy product degrades quickly without preservatives.[51]

On December 1, 2023, a federal jury in Illinois awarded $17.8 million to several large food companies, including Kraft Heinz, in a lawsuit against Cal-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.[66]

See also

References

  1. ↑ "Kraft Heinz will slim down to fit into new Aon Center HQ space". Crain's Chicago Business. July 16, 2015. Retrieved April 26, 2020.
  2. ↑ "2022 Proxy Statement". Kraft Heinz. Retrieved July 2, 2022.
  3. ↑ "The Kraft Heinz Company 2020 Environmental Social Governance Report" (PDF). Kraft Heinz Company. Retrieved September 18, 2020.
  4. 1 2 "SEC Form 10-K". December 31, 2022.
  5. ↑ "The Kraft Heinz Company – Locations". www.kraftheinzcompany.com. Retrieved April 26, 2020.
  6. ↑ "Kraft Heinz headquarters to move to Chicago". Chicago Tribune.
  7. ↑ "The Kraft Heinz Company". www.kraftheinzcompany.com. Retrieved February 11, 2021.
  8. ↑ "Form 8-K". Kraft Heinz Company. U.S. Securities and Exchange Commission. Retrieved February 11, 2021.
  9. ↑ "The Kraft Heinz Company". www.kraftheinzcompany.com. Archived from the original on June 8, 2019. Retrieved June 26, 2019.
  10. ↑ "Fortune 500 Companies 2018: Who Made the List". Fortune. Archived from the original on November 10, 2018. Retrieved November 10, 2018.
  11. 1 2 "Kraft Foods to merge with Heinz". BBC News. March 25, 2015. Archived from the original on February 26, 2017. Retrieved October 9, 2016.
  12. ↑ "H.J. Heinz, Kraft Foods to merge". Institute of Food Technologists. March 25, 2015. Archived from the original on March 28, 2015. Retrieved March 28, 2015.
  13. ↑ Nolan Feeney (March 25, 2015). "Kraft and Heinz Merge to Become World's 5th-Largest Food Company". TIME magazine. Archived from the original on October 8, 2016. Retrieved October 9, 2016.
  14. ↑ "Heinz, Kraft Merger Creates 5th Largest Food, Beverage Company". Natural Products INSIDER. November 21, 2017. Archived from the original on January 12, 2020. Retrieved January 12, 2020.
  15. ↑ "Kraft-Heinz Company FactSheet" (PDF). www.kraftheinzcompany.com. Archived (PDF) from the original on February 2, 2017. Retrieved February 17, 2017.
  16. ↑ "The Kraft Heinz Company Announces Successful Completion of the Merger between Kraft Foods Group and H.J. Heinz Holding Corporation" (PDF). The Kraft Heinz Company. July 2, 2015. Archived from the original (PDF) on July 14, 2015. Retrieved January 23, 2015.
  17. ↑ Lindeman, Teresa F. (March 25, 2015). "Officials: Heinz Field name will not change with merger deal". Pittsburgh Post-Gazette. Archived from the original on May 31, 2016. Retrieved October 9, 2016.
  18. ↑ Farabaugh, Nick (July 10, 2022). "Report: Heinz Field to be Renamed, New Name to be Picked Soon". Steelers Now. Retrieved July 11, 2022.
  19. 1 2 Armstrong, Ashley (February 19, 2017). "Kraft Heinz abandons £115bn Unilever mega-deal". The Telegraph. Archived from the original on February 19, 2017. Retrieved February 19, 2017.
  20. ↑ Chaudhuri, Saabira; Gasparro, Annie; Steele, Anne (February 17, 2017). "Kraft's $143 Billion Bid for Unilever Highlights Squeeze in Consumer Goods". Wall Street Journal. ISSN 0099-9660. Archived from the original on February 17, 2017. Retrieved February 17, 2017.
  21. ↑ Watrous, Monica (October 23, 2017). "Kraft Heinz to acquire food and instant coffee business in Australia". www.foodbusinessnews.net. Retrieved June 10, 2021.
  22. ↑ Hartley, Simon (March 10, 2018). "Kraft Heinz to buy Cerebos, Asian". Otago Daily Times Online News. Retrieved June 10, 2021.
  23. ↑ "Kraft Heinz is going after small organic food brands just as Whole Foods abandons them". Business Insider. Archived from the original on September 18, 2018. Retrieved September 18, 2018.
  24. ↑ "Springboard – Shaping the Future of the Food and Beverage Industry". Springboard. Archived from the original on September 18, 2018. Retrieved September 18, 2018.
  25. ↑ Hirsch, Lauren (November 29, 2018). "Kraft Heinz agrees to buy paleo mayo and dressing company Primal Kitchen". CNBC. Archived from the original on July 30, 2019. Retrieved July 30, 2019.
  26. ↑ Mehta, Tanvi (October 24, 2018). "Kraft Heinz to sell part of India business for about $630 million". Reuters. Retrieved June 12, 2021.
  27. ↑ Torrance, Luke (January 31, 2019). "Kraft Heinz sells off Indian brands, facilities". www.bizjournals.com. Retrieved June 12, 2021.
  28. ↑ Sorvino, Chloe. "Kraft Heinz Names New CEO: Exclusive Interview". Forbes. Archived from the original on July 30, 2019. Retrieved July 30, 2019.
  29. ↑ Smith, Connor. "3 Things to Know About New Kraft Heinz CEO Miguel Patricio". www.barrons.com. Archived from the original on May 3, 2019. Retrieved July 30, 2019.
  30. ↑ Lucas, Amelia (August 26, 2019). "Kraft Heinz says Paulo Basilio to return as CFO". CNBC. Retrieved January 12, 2020.
  31. ↑ Giles, Martin. "Kraft Heinz Appoints New CIO To Deliver An AI Growth Recipe". Forbes. Retrieved January 12, 2020.
  32. ↑ "How One Company Got Top Marks for Inclusion | HRExecutive.com". hrexecutive.com. June 3, 2019. Retrieved December 29, 2020.
  33. ↑ "Parmalat Canada Announces Closing of its Acquisition of Kraft Heinz's "Natural Cheese" Division". Bloomberg. July 2, 2019. Retrieved April 5, 2022.
  34. ↑ Cara Lombardo; Annie Gasparro (September 15, 2020). "Kraft Heinz to Sell Part of Cheese Business for $3.2 Billion". The Wall Street Journal. ISSN 0099-9660. Wikidata Q114685966. Retrieved October 27, 2022.
  35. ↑ "Kraft Heinz to sell part of cheese business for $3.2 Billion". The Wall Street Journal. September 15, 2020. Retrieved September 16, 2020.
  36. ↑ "Kraft Heinz Announces Agreement to Sell Its Natural Cheese Business to Groupe Lactalis". news.kraftheinzcompany.com. Retrieved September 18, 2020.
  37. ↑ Bartz, Diane (November 10, 2021). "U.S. allows Lactalis to buy Kraft's U.S. natural cheese business, with conditions". Reuters. Retrieved November 16, 2021.
  38. ↑ Channick, Robert (November 29, 2021). "Lactalis completes $3.3 billion acquisition of Kraft Heinz natural cheese business, launches new Chicago office". chicagotribune.com. Retrieved December 11, 2021.
  39. ↑ Roth, Emmi (December 2, 2021). "Emmi Roth Expands Its Range of Specialty Cheeses With Addition of Athenos". www.prnewswire.com. Retrieved December 11, 2021.
  40. ↑ Cheese, BelGioioso (December 3, 2021). "BelGioioso Cheese Completes Polly-O Acquisition". Perishable News. Retrieved December 11, 2021.
  41. ↑ "The Kraft Heinz Company Unveils Its Strategic Transformation Plan, Updates 2020 Outlook, and Provides Long-term Financial Algorithm". www.businesswire.com. Business Wire. September 15, 2020. Retrieved December 29, 2020.
  42. ↑ Danigelis, Alyssa (September 17, 2020). "Kraft Heinz Reports Progress on Sustainable Packaging Goals". Environment + Energy Leader. Retrieved September 18, 2020.
  43. ↑ "Kraft Heinz Renews Global Commitments in 2020 Environmental Social Governance Report". news.kraftheinzcompany.com. Retrieved September 18, 2020.
  44. ↑ "Kraft Heinz Reports Fourth Quarter and Full Year 2020 Results". finance.yahoo.com. Retrieved February 11, 2021.
  45. ↑ Lucas, Amelia (February 11, 2021). "Kraft Heinz sells nuts business, including Planters, to Hormel for $3.35 billion". CNBC.
  46. ↑ Tascarella, Patty (June 7, 2021). "Planters packs a punch as Kraft Heinz pockets $3.35B in cash from sale of nuts business". www.bizjournals.com. Retrieved June 12, 2021.
  47. ↑ "Kraft Heinz Enters Into Agreement to Acquire Brazilian Food Company Hemmer | The Kraft Heinz Company". ir.kraftheinzcompany.com. Retrieved September 30, 2021.
  48. ↑ "Kraft Heinz Announces Agreement to Purchase Assan Foods, Headquartered in Istanbul, Turkey | The Kraft Heinz Company". ir.kraftheinzcompany.com. June 11, 2021. Retrieved September 30, 2021.
  49. ↑ "Kraft Heinz Completes Acquisition of Majority Stake in Just Spices, a Technology-Enabled Direct-to-Consumer Business". news.kraftheinzcompany.com. Retrieved January 30, 2022.
  50. ↑ "Global Brands". The Kraft Heinz Company. Retrieved September 29, 2021.
  51. 1 2 "U.S. judge tosses lawsuits about labels on Parmesan cheese". Reuters. August 24, 2017. Retrieved February 28, 2023.
  52. ↑ "Kraft Heinz – 3 Year Stock Price History | KHC". MarcoTrends. Archived from the original on October 27, 2018. Retrieved October 27, 2018.
  53. ↑ "Kraft Heinz shares fall as appetites wane". BBC News. February 22, 2019. Archived from the original on February 23, 2019. Retrieved February 22, 2019.
  54. ↑ "Kraft Heinz Writes Down $1.2 Billion as Brands Wither". www.wsj.com. Archived from the original on August 17, 2019. Retrieved August 18, 2019.
  55. ↑ Maidenberg, Heather Haddon and Micah. "Kraft Heinz Replaces Finance Chief". WSJ. Archived from the original on August 26, 2019. Retrieved August 26, 2019.
  56. 1 2 LaVito, Angelica; Wang, Christine (February 21, 2019). "Kraft Heinz slashes dividend, discloses SEC subpoena". CNBC. Retrieved February 23, 2019.
  57. 1 2 Wattles, Jackie (February 21, 2019). "Kraft Heinz posts huge loss, slashes dividend and reveals SEC investigation". CNN. Retrieved February 23, 2019.
  58. ↑ Imbert, Fred (February 23, 2019). "Berkshire Hathaway battered by Kraft-Heinz woes, posting a Q4 loss and a $3 billion writedown". CNBC. Retrieved February 23, 2019.
  59. ↑ Franck, Thomas (February 22, 2019). "Buffett's Berkshire Hathaway loses $4.3 billion on Kraft Heinz plunge". CNBC. Retrieved February 23, 2019.
  60. ↑ Lucas, Amelia (September 15, 2020). "Kraft Heinz looks to revamp Oscar Mayer brand, cut 20% of products, as it rethinks business". CNBC. Retrieved September 18, 2020.
  61. ↑ Garcia, Tonya. "Kraft Heinz stock upgraded twice with analysts upbeat about ongoing business transformation". MarketWatch. Retrieved September 18, 2020.
  62. ↑ "SEC.gov | SEC Charges The Kraft Heinz Company and Two Former Executives for Engaging in Years-Long Accounting Scheme". www.sec.gov. Retrieved September 11, 2021.
  63. ↑ Stacey, Kiran; Evans, Judith (September 3, 2021). "Kraft Heinz to pay $62m to settle SEC false accounting charges". Financial Times. London. Retrieved September 11, 2021.
  64. ↑ "Kraft Heinz Fined $62 Million For Phony Accounting". Forbes. September 3, 2021. Retrieved May 30, 2022.
  65. ↑ "The Kraft Heinz Company 2021 Form 8-K". sec.gov. U.S. Securities and Exchange Commission. February 16, 2022. Retrieved February 16, 2022.
  66. ↑ "Court awards companies $17.8 million in egg price fixing lawsuit | Food Business News". www.foodbusinessnews.net. Retrieved December 4, 2023.

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