Kraft Heinz(KHC)2023-09-06 19:34Summary of Kraft Heinz Company Conference Call Company Overview - Company: The Kraft Heinz Company (NASDAQ: KHC) - Date: September 6, 2023 - Participants: - Miguel Patricio - CEO - Carlos Abrams-Rivera - President and CEO-elect - Andre Maciel - CFO Key Points Leadership Transition - Miguel Patricio will transition to Non-Executive Chair, with Carlos Abrams-Rivera becoming CEO in 2024, indicating a strategic move for the business as Carlos is deemed ready for the role [2][3][4] Strategic Vision - Carlos Abrams-Rivera supports the existing strategy focused on three growth pillars: U.S. growth platforms, emerging markets, and Foodservice [6][8] - The company has renovated over 90% of its portfolio in the last three years, emphasizing brand innovation and efficiency [8] Financial Performance and Growth Projections - Long-term topline growth is projected at 2% to 3% organic net sales growth, with specific growth rates of 1% to 2% in U.S. retail, 7% in Foodservice, and 13% in emerging markets [10] - U.S. retail growth platforms account for about two-thirds of the business, with notable growth in categories like Taste Elevation (8%) and Easy Meals (6%) in Q2 [11] Pricing and Promotions - The company has improved its promotional strategy, achieving a 10-point better promotional level compared to 2019, with a 15-point improvement in ROI on promotions [20][21] - KHC plans to maintain lower promotional levels compared to 2019, focusing on long-term margin protection [22][23] Market Share and Competitive Position - KHC is seeing sequential improvements in market share, particularly in the Taste Elevation and Easy Meals segments, with a focus on maintaining discipline in pricing and promotions [34][35] Foodservice Strategy - Foodservice is critical for KHC, accounting for 50% of its business, and is seen as a channel for brand exposure and consumer education [39][40] - The company is leveraging partnerships in Foodservice to drive innovation and expand its retail presence [42][43] Emerging Markets - Emerging markets are a strategic focus, with a disciplined approach to growth, particularly in Latin America, where the Heinz brand has high recognition [46][48] - Partnerships, such as with Anheuser-Busch, are being utilized to expand brand presence in new markets [47] Innovation and Product Development - KHC is focusing on innovation, including new product launches like Kraft Mac & Cheese in the frozen aisle and the introduction of Heinz Remix sauces [51][53] - The company is also exploring M&A opportunities, particularly in foodservice, to adapt to changing consumer needs [54][55] Conclusion - The Kraft Heinz Company is positioned for growth through strategic leadership changes, a focus on innovation, disciplined pricing, and expansion in both Foodservice and emerging markets, while maintaining a commitment to brand integrity and consumer engagement.