Tag Archives: Kraft Heinz

Kraft Heinz Wants to Help Launch New Disruptive US Brands

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The Kraft Heinz Company announced the launch of Springboard, a platform dedicated to nurturing, scaling, and accelerating growth of disruptive US brands within the food and beverage space.

The Springboard platform is seeking opportunities to develop brands with authentic propositions and inspired founders within one of four pillars that are shaping the future of the food and beverage space: Natural & Organic, Specialty & Craft, Health & Performance and Experiential brands.

Founders will be encouraged to continue leading their businesses with support and expertise from Kraft Heinz in go-to-market capabilities, research and development and consumer insights.

“We are committed to support and partner with teams that will impact the future of our industry,” said Sergio Eleuterio, General Manager, Springboard Brands. “We are actively searching for emergent, authentic brands that can expand into new categories, and are looking to build a network of founders to help shape the future of foods and beverages.”

Eleuterio has fifteen-years of marketing experience with positions in management, marketing, R&D and retail marketing at Unilever, ABInBev, Grupo Boticário and Kraft Heinz.

Springboard is also launching an incubator program, focused on nurturing food and beverage startups at a pre-valuation stage in a dynamic 16-week sprint in Chicago.

Through April 5, the Springboard will accept applications for first-to-market, disruptive food and beverage startups.

Companies selected to participate in the Springboard Incubator Program will have the opportunity to receive financial support to build brands and guidance to raise additional funding.

The Incubator’s infrastructure will provide program participants with a collaborative work environment and invaluable business resources including dedicated workspace, state-of-the-art pilot plants and commercial kitchens at Kraft Heinz Innovation Center in Glenview, IL. Each participant will have the opportunity to learn from The Kraft Heinz Company’s world-class management practices, global operating scale, and extensive food safety and quality capabilities.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kraft Heinz’s Acquisition of Cerebos Gregg’s Brands Approved

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New Zealand’s competition authority has approved Kraft Heinz’s acquisition of the food and instant coffee business of Cerebos Gregg’s.

The approval requires Kraft Heinz to divest some of Cerebos Gregg’s sauce brands.

Kraft Heinz is expanding its brands marketed in Australia and New Zealand with its purchase of the Cerebos food and instant coffee business from Japan’s Suntory Group.

The announced purchase price is A$290 million.

Kraft Heinz gains popular brands such as the Gravox gravies, which is one of the all-time great Australian brands and traces its roots back to 1917.

Bruno Lino, CEO of Kraft Heinz Australia and New Zealand, who will lead the combined business, said: “The transaction provides an exciting opportunity for Kraft Heinz to expand its portfolio into complementary categories, stretching the footprint of Cerebos’ brands into new categories and markets.”

Cerebos’ Food & Instant Coffee business includes iconic food brands in Australia and New Zealand such as Fountain, Gravox, Saxa, Foster Clark’s, Gregg’s, Bisto, Raro and Asian Home Gourmet. The business has market-leading brands across a number of categories including sauces, gravies, herbs & spices, salt, condiments, Asian sauces, desserts and cooking ingredients.

The sale agreement does not include the Cerebos Fresh Coffee business in Australia/New Zealand, which SBF will retain.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Warren Buffett Steps Down from Kraft Heinz Board of Directors

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The Kraft Heinz Company has announced that Warren Buffett will retire from the Company’s Board of Directors following the end of his term at the upcoming Kraft Heinz 2018 Annual Meeting of Stockholders.

Mr. Buffett decided to retire from the Board as he decreases his travel commitments. The Company also announced that the Board of Directors intends to nominate Alexandre Van Damme to stand for election at the 2018 Annual Meeting to fill Mr. Buffett’s vacancy.

“It has been an honor to work with Warren for the past five years,” said Alex Behring, Chairman of the Board of Directors. “His many invaluable contributions to Kraft Heinz will have a lasting impact on the Company for years to come. The Board of Directors looks forward to his continued partnership as Chairman of our largest shareholder, Berkshire Hathaway. We are thrilled to add Alexandre’s expertise and perspective to Kraft Heinz, and believe that his executive experience and leadership will be extremely valuable to the Board, our leadership and company as a whole.”

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kirksville Kraft Heinz Plant Doubles Employees

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Kraft Heinz’s plant in Kirksville, Missouri has doubled its workforce to 900 employees. The move comes after the plant was expanded from previously 188,000 square feet to 450,000 square feet.

Of the 900 employees, some 860 are regular employees and the remaining 40 are temporary employees hired through an employment service.

The plant is the sole Kraft Heinz bologna producer in North America, and also produces square cut ham, cotto salami, round white turkey.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kraft Heinz Buys Cerebos Brands from Suntory

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Kraft Heinz is expanding its brands marketed in Australia and New Zealand with its purchase of the Cerebos food and instant coffee business from Japan’s Suntory Group.

The purchase price will be A$290 million and includes popular brands such as the Gravox gravies, which is one of the all-time great Australian brands, and traces its roots back to 1917.

Cerebos’ Food & Instant Coffee business includes iconic food brands in Australia and New Zealand such as Fountain, Gravox, Saxa, Foster Clark’s, Gregg’s, Bisto, Raro and Asian Home Gourmet. The business has market-leading brands across a number of categories including sauces, gravies, herbs & spices, salt, condiments, Asian sauces, desserts and cooking ingredients.

The sale agreement does not include the Cerebos Fresh Coffee business in Australia/New Zealand, which SBF will retain.

Cerebos Australia and New Zealand is a trans-Tasman integration of two companies, Cerebos (Australia) Limited and Cerebos Gregg’s Limited in New Zealand. Our parent company, Cerebos Pacific Limited, is based in Singapore and has been wholly owned by Suntory Limited, a Japanese global food and beverage group. Within this structure, the companies have operated with a great deal of autonomy.

Kraft Heinz is the fifth-largest food and beverage company in the world and has a strong platform in Australia and New Zealand, with a staple of well-known brands such as Heinz, Kraft, Wattie’s, Eta and Golden Circle in categories including beans & spaghetti, sauces, soups, sauces & dressings and many others.

Bruno Lino, CEO of Kraft Heinz Australia and New Zealand, who will lead the combined business, said: “The transaction provides an exciting opportunity for Kraft Heinz to expand its portfolio into complementary categories, stretching the footprint of Cerebos’ brands into new categories and markets.”

“In addition to the iconic local brands, Cerebos has a strong team that will play an important role in our future growth. This transaction reinforces our commitment and long-term plan to the Australia and New Zealand markets in addition to our significant investment in the Kraft brand for 2018. We will continue investing in our brands, factories and our employees to meet consumer needs and expectations,” he said.

Terry Svenson, CEO of Cerebos Australia/New Zealand, said the company was pleased with the outcome of the transaction.

“As we announced in April 2017, the Food & Instant Coffee business has a number of market-leading brands across Australia and New Zealand and has made significant progress in recent years, particularly in relation to improvements in manufacturing efficiency. However, Food & Instant Coffee is not a core focus category for SBF and we believe this business can be maximised under different ownership. The Food & Instant Coffee business will now have opportunities to leverage Kraft Heinz’s operations to grow the business further.”

The transaction is scheduled to close in the first quarter of 2018, subject to regulatory approvals.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire to Benefit from Increased Dividend at Kraft Heinz

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As the largest shareholder in Kraft Heinz, the fifth-largest food and beverage company in the world, Berkshire Hathaway will benefit from the company’s recently announced increase in its quarterly dividend.

On August 3, Kraft Heinz announced that its Board of Directors approved an increase in the company’s quarterly dividend to $0.625 per share of common stock, or $2.50 per share of common stock on an annual basis.

This represents an increase of approximately 4.2 percent versus the prior quarterly dividend rate of $0.60 per share, or $2.40 on an annual basis.

The dividend declared is payable on September 15, 2017 to shareholders of record as of August 18, 2017.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kraft Heinz Keeps Fullerton Factory Open Due to Lunchables Demand

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Kraft Heinz has decided to keep open a factory in Fullerton, California, which it had scheduled to close at the end of 2016.

In November 2015, the company announced its plans to reduce excess capacity by closing seven manufacturing facilities, including the Fullerton plant which employs 430 people.

The plant makes Lunchables, a prepackaged lunch for kids that is sold under the Oscar Mayer brand. According to the L.A. Times, the company reports it is facing “an undersupply of Lunchables.”

The move to keep the plan open comes after Teamsters Local 952 ratified a new 3-year Agreement that raises wages but cuts some Kraft Heinz’s health care costs.

According to the Teamsters, the Agreement “included minor concessions and significant improvements to the H&W with no employee contribution for the first year and minor employee contribution rate for each of the following years. The Agreement also includes yearly wage increases of thirty-five (0.35) cents on Jan. 1st of each year of the contract. Additionally, workers secured a pay-out of the Productivity Bonus of three thousand ($3,000) dollars which will be paid out thirty days after ratification as well as a severance package security going forward.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Commentary: Is Now the Time for Kraft Heinz to Make a Play For Mondelez?

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When Berkshire Hathaway and 3G Capital put together Kraft Heinz in 2015, the talk in the street was all about whether adding Mondelez International would be the next step. After all, Mondelez used to be part of Kraft before it was spun-off in 2012.

At the time, Warren Buffett downplayed the idea, noting that the newly formed Kraft Heinz had much to do in order integrate the two companies.

“At Kraft Heinz, we have our work cut out for us for a couple of years,” Buffett told CNBC. “Frankly, most of the food companies sell at prices that it would be very hard for us to make a deal even if we had done all the work needed at Kraft Heinz.”

Is Now the Time?

Here we are a year later and the fate of Mondelez in the rapidly consolidating food industry is still not clear. The company just dropped its proposed takeover of chocolate king Hershey, and the question of whether it’s an acquirer or acquiree is back in play.

As far as size goes, Mondelez has a market cap of roughly $67 billion, as compared to Kraft Heinz’s $109 billion, and combined they would put Kraft Heinz ahead of Unilever, which has a market cap of $143.4 billion, and move it closer to Nestle, which has a market cap of over $246 billion.

Berkshire and 3G Capital

Warren Buffett has clearly been pleased with his dealings with Jorge Paulo Lemann, Alex Behring and Bernardo Hees of 3G Capital. Partnering with 3G has brought a tough, tight-fisted management style that seeks to ring inefficiencies out of large-scale legacy companies, and Berkshire has benefited by gaining equity and putting large chunks of cash to work financing the deals.

Much of Berkshire’s financing takes the form of preferred stock, which has paid high interest rates in a low interest rate world. It’s a deal that Buffett loves, and one that he also used to help shore up companies such as Bank of America, Goldman Sachs and Dow Chemical during the Great Recession.

However, the high interest dominoes have been falling one after another as companies became healthy enough to get cheaper financing.

Similarly, when Berkshire and 3G went in on Kraft Heinz in 2013, Berkshire received $8 billion in preferred shares that paid it $720 million annually. Those shares were redeemed this summer as Kraft Heinz moved to lower its borrowing costs. It was a move that Buffett lamented in his annual letter to shareholders “…will be good news for Kraft Heinz and bad news for Berkshire.”

In addition, Berkshire’s $3 billion in preferred stock in Dow Chemical, which currently pays Berkshire $255 million a year, looks likely to end this year unless the market slumps, keeping the price of Dow Chemical shares below $53.72. .

Now that those deals have been coming to an end, a large chunk of preferred stock from a combined Kraft Heinz and Mondelez merger would be a fitting substitute.

Placing Their Bets

In August 2015, activist investor Bill Ackman took a $5.6 billion stake in Mondelez, a bet that clearly signaled he thought the snack maker would be acquired.

Among the other potential buyers could be Pepsi, which already owns Frito-Lay, and is facing declining sales in the traditional soda business, as consumers look for healthier options.

A Prize Worth Winning?

While a merger of Kraft Heinz and Mondelez has made sense to Wall Street, does it ultimately make sense in the world of consumer preferences in the 21st century?

When Mondelez was spun-off from Kraft, it was supposed to be the more exciting, high-flying of the two companies. However, its stock promptly slumped, and today it’s barely higher than it was five years ago. Many of Mondelez’s brands, which include Triscuit, Ritz, and Chips Ahoy!, reflect the consumer tastes from the 1930s-1960s, and its Oreo cookie goes back even further, first hitting store shelves in 1912. These brands are still popular, but will they be in another fifty years?

So, is Mondelez even a prize worth winning? That depends on whether there are similar savings that can be wrung out of Mondelez as there has been with Kraft and Heinz. If Berkshire and 3G think there are, there could be the next global food giant ready to take the stage.

One thing that is clear, in the 21st century world of food manufacturing and distribution companies, the assumption is that size matters in order to have global reach that can take advantage of growing markets in South America, India and China.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Kraft Heinz Dividend Increase Means Extra $10.57 Million for Berkshire

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Kraft Heinz has announced that its Board of Directors approved an increase in the company’s quarterly dividend to $0.60 per share of common stock, an increase of approximately 4.3 percent versus the prior rate of $0.575 per share.

The company, which is 26.78 percent owned by Berkshire Hathaway, posted earnings of $0.85 per share on total revenue of $6.79 billion.

The increase of 4.3 percent will bring Berkshire an addition $10.57 million in dividends.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

No Kraft Heinz Hotdogs at Heinz Field

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It might seem logical that Heinz Field, which is the home of the NFL’s Pittsburgh Steelers, would serve Kraft Heinz’s Oscar Meyer hotdogs, but that’s not to be.

On June 28, the Smith Provision Company announced that it entered into a multi-year agreement with Heinz Field, featuring Smith’s Hot Dogs as The Hot Dog of Heinz Field, and Smith’s brand Boski Kielbasa as The Kielbasa of Heinz Field.

“We are thrilled to have developed a partnership with the iconic Pittsburgh Steelers organization,” said Sara Kallner, Vice President of Smith Provision Company. ”

Headquartered in Erie, Pennsylvania, the Smith Provision Company was founded in 1927 by Harry Smith, who operated Smith’s as a small retail butcher shop. The company was bought by the Weber family, which as a fourth generation family owned business, still runs it today.

Oh, well, hopefully Heinz Field will still top the hotdogs with Kraft Heinz’s yellow mustard, ketchup and relish. No telling whether Kraft Heinz’s Grey Poupon mustard will make the cut.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.