Advertise with fastmoving.co.za
 
 

Kraft Heinz named Miguel Patricio as its next chief executive.
Kraft Heinz named Miguel Patricio as its next chief executive.

Kraft Heinz hires global brand expert Miguel Patricio as CEO

INTERNATIONAL NEWS

By Richa Naidu and Uday Sampath Kumar - Apr 24th, 11:18

Kraft Heinz named Miguel Patricio as its next chief executive in the hopes that the 30-year marketing veteran will revitalize brands such as Planters nuts and Oscar Mayer bacon at one of the world's largest packaged food companies.
 

Patricio, a native of Portugal, will take over the top job in July after two decades at Anheuser-Busch InBev, where he rose to become the company's global head of marketing, building sales of beer brands Corona, Budweiser and others.

Before AB InBev, Patricio worked at major consumer companies including Philip Morris, Coca-Cola and Johnson & Johnson.

He succeeds Bernardo Hees, who was made CEO in 2015 when Kraft Foods and HJ Heinz merged.

His appointment comes two months after Kraft Heinz slashed its quarterly dividend, wrote down the value its marquee Kraft and Oscar Mayer brands and other assets by more than $15bn. It also disclosed that it had been subpoenaed by the US Securities and Exchange Commission.

Kraft Heinz's second-biggest shareholder, Brazilian private equity fund 3G Capital, has pushed the company to rein in expenses to tackle higher costs and sluggish growth, a strategy it has successfully implemented at holdings including Heinz and Anheuser-Busch.

"Great companies are the ones that have the costs in control, that grow the top line, and grow the bottom line – it’s not one or the other", Patricio said in an interview. “I have very good experience on that - on being more efficient every year, which doesn't mean cutting costs. It means to be more efficient."

Kraft's cost cuts, made at the urging of 3G, resulted in smaller marketing and advertising budgets for key brands such as Oscar Mayer bacon and the loss of brand managers, which translated to market share loss to cheaper, private-label competitors, according to two former Kraft Heinz marketing employees.

On top of that, the broad sector has struggled with rising transportation and commodity costs along with a shift in consumer preferences to more niche health-focused brands.

Warren Buffett's Berkshire Hathaway and 3G together own close to 50% of Kraft Heinz. Berkshire Hathaway did not immediately response to requests for comment.

SEC probe

The company also disclosed in February that it had been subpoenaed by the US Securities and Exchange Commission related to an investigation into its accounting policies, procedures and internal controls related to procurement.

At the time, Kraft said it was working on ways to improve its internal controls and determined the problems required it to record a $25m increase to the cost of products sold.

"The change at the top of Kraft Heinz is a positive development," said Roosevelt Investment Group fund manager Jason Benowitz, which previously held a stake in Kraft Heinz.

"It shows that management and the board understand the serious nature of the challenges facing the company. Kraft Heinz ... cannot further cost cut its way to prosperity."

The company's shares edged higher midday trading to $33.09. The stock has lost half its value since Heinz and Kraft merged.

Kraft Heinz has been the worst performing stock on the S&P 500 Packaged Foods and Meats index over the past year, falling about 43%.

"By appointing Mr Patricio as the new CEO, it appears that Kraft Heinz is doubling down on its efforts to reinvigorate the top line," Bernstein analyst Alexia Howard wrote in a note.

Patricio's experience as the president of Asia Pacific of Anheuser-Busch InBev might enable him to explore more growth opportunities in emerging markets at Kraft Heinz, she said.Business Live 

Related News

Brand champions, ambassadors and advocates
11/06/2019 - 14:55
Paying people to promote brands has long been a contentious – and confusing – issue in the industry. There is confusion around the terminology, what they’re actually called, and controversy and cynicism about whether it’s an effective way to market a brand or not.

Global footprint for SA veldskoen
29/05/2019 - 10:17
Prince Harry wears them, Ashton Kutcher bought a share in the company that makes them and these days some brides even get married in them. We’re talking about the common or garden South African veldskoen, but there’s nothing ordinary about these shoes with their zany different coloured soles available in a seven-colour spectrum.

Pioneer Foods’ shares plunge to six-year low on earnings decline
20/05/2019 - 16:24
Shares in Pioneer Foods, which makes Sasko bread and Ceres juice, plunged to a six-year low after the group said it was struggling to pass on higher costs to consumers.

Brand engagement and the seniors' market: golden truths about the golden years
13/05/2019 - 11:19
It’s no secret that we live in a youth-obsessed society. This is perhaps no more evident than in the contemporary branding, media, marketing, and entertainment industries. Page through any mainstream publication, peruse the advertising screened on prime-time television or consider the media personalities that are held in the highest regard to see just how much youthfulness is lauded. Even from a strategic perspective, there is hardly a brand in existence today that is not affording consideration to attracting and engaging the “youth market”.

5 ways digital technology is reshaping the needs and expectations of SA’s young consumers
03/05/2019 - 15:00
We’re seeing the needs, expectations and behaviours of young South African consumers evolve at a pace that threatens to leave brands behind. As centennials – or Generation Z – move into the workforce and become the next wave of consumers, brands will need to rethink many of their assumptions about what customers want.