Tag: Kraft Heinz

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Johns Manville

3G Sells Some of Its Kraft Heinz Shares

(BRK.A), (BRK.B)

As of the end of the second quarter, Warren Buffett still appears to be confident in Kraft Heinz, but not so 3G Capital, which partnered with Berkshire Hathaway in 2015 to merge Heinz with Kraft.

3G sold 20.6 million shares of its stake in Kraft Heinz on Tuesday, August 7, at $59.85 per share

3G still owns 270.1 million shares, second only to Berkshire Hathaway’s
325,634,818 shares.

Down from Kraft Heinz’s 52-wk high of $85.16, the stock has recently been in the doldrums, trading just below $60.

3G’s 7% reduction in its Kraft Heinz stake comes as consumers have become increasingly indifferent to many of the brands that were popular over the last fifty years.

In April, at the 2018 Milken Institute Global Conference, 3G’s Jorge Paulo Lemann said, “I’m a terrified dinosaur,” when referring to the disruption for legacy brands that comes from changing consumer tastes.

Kraft Heinz has been trying to add new products to its familiar brands that include Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Smart Ones and Velveeta.

In May 2018, the company announced that its new Springboard Incubator Program would launch five disruptive brands that included antioxidant lemonades, avocado-based sauces, egg-white chips, fermented kraut, and South-African biltong & droëwors.

© 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.

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Acquisitions Kraft Heinz

Kraft Heinz Covets Campbell

(BRK.A), (BRK.B)

Kraft Heinz is looking to acquire Campbell according to a report in the New York Post.

According to the Post, Kraft Heinz assumes that the soup company’s strategic review will lead to a sale, especially after its stock has tumbled 21% in the past six months, and it wants to be first in line.

In addition to its familiar soups, Campbell owns a host of top brands, including Pepperidge Farm breads, cookies and Goldfish crackers; Royal Dansk and Kjeldsens cookies; V8 beverages; Bolthouse Farms beverages, carrots and dressings; Plum Organics baby food; Swanson broths; Prego pasta sauces; Garden Fresh Gourmet fresh refrigerated salsas, dips and hummus, and Pace sauces.

Campbell has been seeking to spur its own growth through acquisition. In March, Campbell created a new snack division after its $4.87 billion cash acquisition of snack-maker Snyder-Lance. The deal was financed with $5.3 billion of bonds.

The company is projecting $10 billion in annual revenue from its snack brands, however the acquisition price was considered steep to say the least.

Ask any analyst about potential Berkshire Hathaway acquisitions and Campbell usually finds its way on the list.

Kraft Heinz was rebuffed in its megadeal for Unilever in February 2017, so smaller deals look to be the way forward for now.

With 3G Capital’s Bernardo Hees at the helm, Kraft Heinz has been in relentless cost-cutting mode since 2015, and Campbell has been in the midst of its own $500 million effort, so it’s not clear how much more savings Kraft Heinz can wring out of it.

In any case, Kraft Heinz, which is in third place worldwide among global food conglomerates, is clearly looking to move up the chart. With Berkshire’s money behind it, there’s little doubt they will.

© 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.

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Johns Manville

Kraft Heinz Maps Future With New Innovation Center in The Netherlands

(BRK.A), (BRK.B)

Kraft Heinz is opening a €90m innovation center in Amsterdam’s Zuidas business district.

The center will employ 450 people and its goal is not so much brand or product development as focusing the food conglomerate on new ways of operating.

The center’s location will be just 10 minutes from Schiphol airport, a major European hub.

The Centre for Excellence will “devise ways to work more efficiently by creating globally applicable best practices.”

“The Global Centre of Excellence is focused on new methods of growth and operational efficiencies while our R&D and culinary centre in Nijmegen continues to drive new product development across the Zone,” noted Rafa Oliveira, president of Kraft Heinz’s operations in Europe, the Middle East and Africa.

The Netherlands is a major focal point for Kraft Heinz’s European operations. The company already has a R&D and culinary center in Nijmegen and production facilities in Elst and Utrecht.

In 2017, the company opened a 61,700 sq m distribution facility at the Park15 industrial park in the Arnhem-Nijmegen region of the eastern Netherlands. The business park is strategically located between the port of Rotterdam and the German Ruhr Valley.

© 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.

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Kraft Heinz Stock Portfolio

Kraft Heinz’s Springboard Unveils Its First Incubator Class of Disruptive Brands

(BRK.A), (BRK.B)

Kraft Heinz’s Springboard, a recently launched platform to nurture, scale, and accelerate growth of disruptive brands, announced its inaugural Incubator Program class.

The program was created to help nurture and develop the next generation of food & beverage brands, nurturing and being close to entrepreneurs, new ideas and consumer trends.

“Hundreds of applications were carefully reviewed to select authentic propositions and inspired founders within one of the four pillars shaping the future of food: Natural & Organic, Specialty & Craft, Health & Performance, and Experiential brands,” said Sergio Eleuterio, General Manager, Springboard Brands. “We are excited to kick off our program with a group of great founders, amazing and purposeful products, that we wholeheartedly believe will succeed in the marketplace.”

Over the course of the next 16 weeks, the selected startups will participate in a dynamic program composed of learning, funding, infrastructure access, and mentorship in Chicago, Illinois.

The inaugural Springboard brands are:

Ayoba-Yo introduces a high quality, nutritious, and delicious alternative to traditional beef jerky and meat sticks, known as Biltong & Droewors. Founders and South-African native brothers, Wian and Emile van Blommestein, introduced their 400-year-old family recipe to the market in 2017. Their 14-day air-drying process, combined with high quality meat cuts and spices deliver incredibly tender, savory, and sugar-free products with no shortage of flavor.

Cleveland Kraut is perfectly positioned to grow within the fermented foods market. A bold brand, grounded in and proud of its Cleveland heritage, dedicated to serving the great tasting healthy fermented foods at a fair price. The team is led by Drew Anderson who, along with his brother Mac and brother-in-law Luke, aim to be the kings of fermented foods by expanding from their kraut roots.

Kumana, best known for its signature Venezuelan-inspired Avocado Sauce, is a Los Angeles-based company creating original sauces representing the diverse and delicious flavors from different regions of the worlds. Venezuelan native, Francisco Pavan, and his partner Todd Vine channeled their passion for pure discovery into the core values of this brand.

Poppilu, a Chicago-based antioxidant lemonade brand, gives consumers permission to love lemonade again. Melanie Kahn, Poppilu’s founder, has developed a truly irresistible, mouth puckering, high-antioxidant citrus refreshment. It features Midwest-grown aronia berries, one of the highest antioxidant fruits in the world, and is one of the many reasons this brand will soar.

Quevos, believes the days of sinful snacking are over– it’s time to munch on snacks made from real food that taste great and are even greater for you. Quevos are salty and crunchy egg-white chips that are low in carbs and fat, and packed with protein. The disruptive brand was founded by young, ambitious University of Chicago students-Nick Hamburger and Zach Schreier.

© 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.

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Kraft Heinz Minority Stock Positions Special Report

Kraft Heinz Updates Classic Brands for Millennials

(BRK.A), (BRK.B)

With Kraft Heinz facing a millennials generation of consumers focusing increasingly on products billed as healthy and organic, the processed food manufacturer is not only looking to launch news products, but also to update its classic brands.

On the new products front, the company recently launched Springboard, a platform dedicated to nurturing, scaling, and accelerating growth of disruptive US brands within the food and beverage space.

According to the company, 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.

“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.”

As for Kraft Heinz classic brands, it is increasingly reformulating its products to meet millennials’ shopping priorities.

Kraft Heinz’s CEO Bernardo Hees cites CapriSun, which millennials grew up with, as a brand that they will come back to now that it has an organic line. It advertises that its CapriSun Organic uses organic juice from organic farms.

In 2016, the company’s Kraft Mac & Cheese, which generations of children have eaten the bright orange noodles, successfully removed the artificial food colors, including yellow 5 and yellow 6, and replaced them with paprika, annatto and turmeric. Consumers didn’t notice the difference in the product’s look and feel.

Even the iconic hot dog, that most processed of foods, got reworked, In 2017, the Oscar Mayer brand changed its hot dogs to contain no added nitrates or nitrites, no artificial preservatives in their meat, and no by-products in every single one of their hot dogs. Oscar Mayer trumpets that it was the first national brand to do this across every single one of its hot dogs.

Kraft Heinz’s first-quarter net income rose to $993 million, 81 cents a share, up from $893 million, 73 cents a share, from the same period in 2017.

© 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.

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Kraft Heinz Minority Stock Positions Stock Portfolio

Kraft Heinz Partners with the Food Network for Product Line

(BRK.A), (BRK.B)

Kraft Heinz has launched Food Network Kitchen Inspirations, a new line of globally inspired Salad Dressings, Cooking Sauces and Meal Kits.

Food Network Kitchen Inspirations is billed as the first-ever grocery product line from Food Network that allows fans to bring home the flavors of the Food Network.

Food Network Kitchen Inspirations gives people the tools they need to make dishes they’re proud of. Every product in the new line either inspires people to try global flavors at home with meal kits like Chicken Tikka Masala, or takes classics up a notch with an inspired take on Creamy Parmesan Caesar Dressing. Each category incorporates authentic flavors and is made with high-quality ingredients, free from artificial flavors, colors or dyes.

“At Kraft Heinz, we are known for our iconic brands that have been staples at dinner tables for decades. This opportunity is especially exciting for us because the new Food Network Kitchen Inspirations products make it easy for people to expand beyond their culinary comfort zones and try new flavors,” said Liz Rubin, senior associate brand manager for Meals at Kraft Heinz. “We are thrilled to partner with Food Network to help consumers spice up their meals and inspire them to get creative in their own kitchens.”

“Food Network has always been a source of culinary inspiration and education, but until now has never offered food products people can bring into their homes,” said Ron Feinbaum, senior vice president and general manager of home promotions and consumer products for Discovery, Inc., parent company of Food Network. “With busy schedules, we know that weeknights can be the hardest time to try new recipes, but with Food Network Kitchen Inspirations Salad Dressings, Cooking Sauces and Meal Kits, people can now make convenient meals without sacrificing flavor.”

“The inspiration for this new product line grew out of a successful marketing partnership we’ve had for many years with The Kraft Heinz Company,” added Karen Grinthal, senior vice president of national ad sales for Food Network. “Kraft Heinz is a key partner with Food Network, and we couldn’t be more pleased with this exciting evolution.”

© 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.

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Kraft Heinz Minority Stock Positions Stock Portfolio

Kraft Heinz Likely Bidder for GlaxoSmithKline’s Horlicks

(BRK.A), (BRK.B)

GlaxoSmithKline is looking to find a buyer for its malted-milk brand Horlicks, as it raises funds for its $13 billion buyout of its consumer healthcare joint venture with Novartis.

Reportedly in the bidding for Horlicks is Kraft Heinz, as the drink is popular in the United Kingdom, Australia, New Zealand, Hong Kong, Bangladesh, India, and Jamaica.

Made from wheat, malt barley, sugar, milk and vitamins, the beverage dates back to 1873 when Horlicks was invented by two British-born men, William Horlick and his brother James Horlick from Gloucestershire, England. James was a chemist, working for a company that made dried baby food. William, the younger brother, had emigrated to the United States in 1869 and James decided to join him in Chicago in 1873. That same year, they started their own company, J&W Horlicks, to make a malted milk drink. They called their product ‘Diastoid’ and their advertising slogan read: ‘Horlick’s Infant and Invalids Food’.

The company that acquires Horlicks will have to cope with a decline in the popularity of malted-milk sector. In India, negative volume growth in the health food drinks segment was -6.8% in 2016-17, according to India’s The Economic Times.

“Horlicks is a terrific brand with a long history, especially in India,” GSK Chief Executive Officer Emma Walmsley noted at a recent investors’ meeting. “But in the context of funding for this (Novartis) transaction and our desire to increase focus on our over-the-counter and oral health portfolios, as well as other group capital allocation priorities, it makes sense for us to review it.”

© 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.

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Kraft Heinz

Kraft Heinz Wants to Help Launch New Disruptive US Brands

(BRK.A), (BRK.B)

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.

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Acquisitions Kraft Heinz

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

(BRK.A), (BRK.B)

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.

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Kraft Heinz Warren Buffett

Warren Buffett Steps Down from Kraft Heinz Board of Directors

(BRK.A), (BRK.B)

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.