Kraft Heinz Plans To Ramp Up Investments

Three years after Kraft Food Group and H.J. Heinz merged, the combined company may be hungry for acquisitions. After cutting $1.7 billion from spending, executives of Kraft Heinz said it’s now time for growth and investment, The Chicago Tribune reported.

Kraft Heinz CEO Bernard Hees said the company plans to invest in sales, manufacturing and distribution in an effort to increase sales. More specifically, Chief Financial Officer David Knopf said the company plans to invest $800 million in capital expenditures, $300 million in its brands and workforce and $1.3 billion in its pension plans. When asked about acquisitions on Friday (May 25) by analysts, Hees said the company would seek brands that could perform well globally.

The news comes as Heinz — the firm that first brought the world the 57 flavors that make up the ketchup’s majesty – is rolling out a new product called Mayochup. So, why Mayochup?

According to The Wall Street Journal, it’s all about the battle for condiment dominance, particularly the mayonnaise roost. Hellmann’s, owned by Unilever, is currently the peerless king of mayo. Kraft (which owns Heinz) and Hellmann’s collectively own 80 percent of the mayo market, but Hellmann’s comes out on top, controlling just over 50 percent of the market. In an era when people are buying less mayonnaise, opting for healthier variations that use avocado oil, Hellmann’s managed to improve its market share. Bring out the Hellmann’s, “bring out the best” apparently has a hold on people.

Kraft’s shares, on the other hand, have been slipping. Its flagship “mayonnaise-like product” Miracle Whip has seen its sales decline in the last two years. Miracle Whip, for legal reasons, cannot be called mayonnaise, because it does not use the correct balance of oil in the recipe.

Mayochup is one of many tweaks coming to condiments this summer. However, ketchup is considered by many to be the world’s most perfectly balanced food product — and thus nearly impossible to improve.



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