Kraft Heinz Co. said it plans to cut $2 billion in costs over five years, returning to the strategy that drove the company’s formation in a merger five years ago.
Chief Executive Miguel Patricio said in an interview that the company would make cuts more strategically than during the tenure of his predecessors, when the company’s brands lost billions of dollars in value. Mr. Patricio, who became CEO last year, said he plans to use some of the savings to re-energize sales of certain brands, increasing marketing spending by 30% overall. He said the company would detail plans for the cuts and for brands it will target for further investment in an investor presentation Tuesday.
“In the past, we made decisions that were too short term,” Mr. Patricio said. “We are changing that mind-set.”
During the coronavirus pandemic, Kraft Heinz’s brands such as Oscar Mayer deli meat and Kraft macaroni and cheese have benefited along with those of other food makers from consumers stockpiling groceries. Kraft Heinz has logged stronger sales growth in the past six months than it has in years.
Still, the company has lost market share in some categories. Analysts have said Kraft Heinz is losing shoppers to lower-priced store brands of cheese, deli meat and coffee. That is hurting sales of Kraft Heinz products including its century-old Maxwell House brand.
Kraft Heinz Plans $2 Billion in Cost Cuts – The Wall Street Journal