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Kraft Heinz (KHC) Poised on Pricing & Transformation Efforts
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The Kraft Heinz Company (KHC - Free Report) is on track with undertaking sustainable pricing actions to drive growth. The iconic consumer packaged food and beverage company is focused on transforming its business to unleash its full potential. To this end, management is accelerating its strategic plan and augmenting its geographic presence.
Let’s delve deeper.
Pricing Actions Solid
Solid pricing initiatives have been aiding Kraft Heinz for a while now. In second-quarter 2023, the company’s pricing rose 11 percentage points, reflecting higher list prices. In the North America and International segment, pricing increased 9.4 and 16.5 percentage points, respectively. Robust pricing efforts boosted the company’s quarterly net sales, which increased 2.6%. Management expects an adjusted gross margin expansion, driven by pricing and gross efficiencies, in 2023.
What Else is Working Well for Kraft Heinz?
Kraft Heinz is committed to accelerating its profit and enhancing the long-term shareholders’ value. As part of its next transformation phase, management unveiled AGILE@SCALE in February 2022. The strategy has been helping Kraft Heinz to enhance its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators. The company has been focused on Revenue Management initiatives via proprietary digital solutions. The company is on track to deliver solutions in its value chain to accelerate growth and drive efficiencies.
KHC is on track with managing its portfolio and accelerating its strategic plan, augmenting geographic presence and increasing focus on growth areas. Keeping this in mind, Kraft Heinz offloaded its B2B powdered cheese business to Kerry Group in the second half of 2022. In November 2021, the company concluded the sale of certain assets in the global cheese business along with the license of specific trademarks to an affiliate of Groupe Lactalis.
Meanwhile, the company undertakes strategic acquisitions to increase its presence. In April 2022, Kraft Heinz acquired a majority stake in a Brazil-based condiments and sauces company — Companhia Hemmer Industria e Comercio ("Hemmer"). The buyout has widened Kraft Heinz's International Taste Elevation platform and enhanced its presence across emerging markets. In January 2022, KHC acquired an 85% stake in Germany-based Just Spices GmbH (“Just Spices”). The buyout enhanced its direct-to-consumer operations and go-to-market expansion.
Certainly, Kraft Heinz’s solid growth efforts and strategic pricing actions will certainly sustain its growth momentum.
Other Food Stocks Benefiting From Buyouts
Several other companies in the food space, like Kellogg Company (K - Free Report) , Hormel Foods Corporation (HRL - Free Report) and McCormick & Company, Incorporated (MKC - Free Report) , are benefiting from acquisitions.
Kellogg acquired protein bar maker Chicago Bar Company in 2017. Chicago Bar Company makes RXBAR, considered one of the fastest-growing nutrition bar brands in the United States. K’s Pringle's buyout has been lucrative. With the Pringles deal, Kellogg transformed itself from a large U.S. snacks business to a true global snacks player.
Hormel Foods is strengthening its business through strategic acquisitions. In the fourth quarter of fiscal 2022, HRL announced its acquisition of a minority stake in Indonesia-based food and beverage company PT Garudafood Putra Putri Jaya Tbk. The move will likely help Hormel Foods expand its presence in Indonesia and Southeast Asia. In June 2021, HRL acquired the Planters snacking portfolio from Kraft Heinz.
McCormick has strategically increased its presence through acquisitions and strengthened its portfolio. In December 2020, MKC bought a 100% stake in FONA International, LLC and some affiliates. FONA’s diverse portfolio helps McCormick bolster its value-added offerings and expand the flavor solutions segment into attractive categories. In November 2020, McCormick acquired the parent company of Cholula Hot Sauce — a premium Mexico-based hot sauce brand.
Image: Bigstock
Kraft Heinz (KHC) Poised on Pricing & Transformation Efforts
The Kraft Heinz Company (KHC - Free Report) is on track with undertaking sustainable pricing actions to drive growth. The iconic consumer packaged food and beverage company is focused on transforming its business to unleash its full potential. To this end, management is accelerating its strategic plan and augmenting its geographic presence.
Let’s delve deeper.
Pricing Actions Solid
Solid pricing initiatives have been aiding Kraft Heinz for a while now. In second-quarter 2023, the company’s pricing rose 11 percentage points, reflecting higher list prices. In the North America and International segment, pricing increased 9.4 and 16.5 percentage points, respectively. Robust pricing efforts boosted the company’s quarterly net sales, which increased 2.6%. Management expects an adjusted gross margin expansion, driven by pricing and gross efficiencies, in 2023.
What Else is Working Well for Kraft Heinz?
Kraft Heinz is committed to accelerating its profit and enhancing the long-term shareholders’ value. As part of its next transformation phase, management unveiled AGILE@SCALE in February 2022. The strategy has been helping Kraft Heinz to enhance its agile expertise and capabilities via partnerships with technology giants and cutting-edge innovators. The company has been focused on Revenue Management initiatives via proprietary digital solutions. The company is on track to deliver solutions in its value chain to accelerate growth and drive efficiencies.
KHC is on track with managing its portfolio and accelerating its strategic plan, augmenting geographic presence and increasing focus on growth areas. Keeping this in mind, Kraft Heinz offloaded its B2B powdered cheese business to Kerry Group in the second half of 2022. In November 2021, the company concluded the sale of certain assets in the global cheese business along with the license of specific trademarks to an affiliate of Groupe Lactalis.
Meanwhile, the company undertakes strategic acquisitions to increase its presence. In April 2022, Kraft Heinz acquired a majority stake in a Brazil-based condiments and sauces company — Companhia Hemmer Industria e Comercio ("Hemmer"). The buyout has widened Kraft Heinz's International Taste Elevation platform and enhanced its presence across emerging markets. In January 2022, KHC acquired an 85% stake in Germany-based Just Spices GmbH (“Just Spices”). The buyout enhanced its direct-to-consumer operations and go-to-market expansion.
Certainly, Kraft Heinz’s solid growth efforts and strategic pricing actions will certainly sustain its growth momentum.
Other Food Stocks Benefiting From Buyouts
Several other companies in the food space, like Kellogg Company (K - Free Report) , Hormel Foods Corporation (HRL - Free Report) and McCormick & Company, Incorporated (MKC - Free Report) , are benefiting from acquisitions.
Kellogg acquired protein bar maker Chicago Bar Company in 2017. Chicago Bar Company makes RXBAR, considered one of the fastest-growing nutrition bar brands in the United States. K’s Pringle's buyout has been lucrative. With the Pringles deal, Kellogg transformed itself from a large U.S. snacks business to a true global snacks player.
Hormel Foods is strengthening its business through strategic acquisitions. In the fourth quarter of fiscal 2022, HRL announced its acquisition of a minority stake in Indonesia-based food and beverage company PT Garudafood Putra Putri Jaya Tbk. The move will likely help Hormel Foods expand its presence in Indonesia and Southeast Asia. In June 2021, HRL acquired the Planters snacking portfolio from Kraft Heinz.
McCormick has strategically increased its presence through acquisitions and strengthened its portfolio. In December 2020, MKC bought a 100% stake in FONA International, LLC and some affiliates. FONA’s diverse portfolio helps McCormick bolster its value-added offerings and expand the flavor solutions segment into attractive categories. In November 2020, McCormick acquired the parent company of Cholula Hot Sauce — a premium Mexico-based hot sauce brand.