PITTSBURGH — Momentum in emerging markets, with sales up nearly 8% in the first half of this fiscal year, could continue to bolster Kraft Heinz Co. financial results for another five years, said Miguel Patricio, chief executive officer. Growth basically is coming from Latin America, the Middle East and Eastern Europe, he said Sept. 8 in the Barclays Global Consumer Staples Conference, which is being held virtually.
Kraft Heinz executives in different countries are learning from each other, Patricio said. One example involves a route-to-market program created in Brazil that is being used in other countries.
Emerging markets represent about 10% of Kraft Heinz net sales, but they offer “great potential and a great momentum,” Patricio said.
“So we have to invest and look at emerging markets as a great opportunity for growth, a great white space,” he said.
Domestically, Kraft Heinz could continue to benefit from at-home eating. More consumers may continue to work at home once COVID-19 subsides.
“Just an example in our company, we are going to work in a hybrid way: two days a week from home, three days a week in the office,” Patricio said. “Just that it's more of our time at home, right? And that has, of course, consequences on consumption when you compare with pre-pandemic.”
Inflation and rising input costs probably will continue, too, all the way into 2022, Patricio said. Kraft Heinz has implemented pricing and other revenue management initiatives to deal with inflation.
A design-to-value focus involves choosing the right ingredients and the right packaging size, said Carlos A. Abrams-Rivera, US Zone president. Another tool to combat in inflation comes in portfolio renovation. Year-to date, Kraft Heinz has renovated about 45% of its portfolio, Abrams-Rivera said.
“By the end of 2022, that number will be 90%, which means that as we’re going through this, we’re also making sure that our portfolio is stronger as consumers continue to have very strong demand for our products,” he said.