Kraft’s new CEO faces tough task: revive ‘dusty’ brands
Kraft Heinz has named a new chief executive, appointing a fellow veteran manager of companies backed by investment firm 3G Capital to succeed Bernardo Hees amid some troubled times for the US food giant.
He is Miguel Patricio, the former chief marketing officer of brewer AB InBev, where 3G is also a top investor.
Just two months ago, Kraft Heinz shocked Wall Street by announcing a dividend cut, weak guidance outlook, the write-down in the value of its Kraft and Oscar Mayer brands by $15.4-billion and an investigation by the US Securities and Exchange Commission into its procurement accounting and control policies.
Patricio will have his hands full when he takes over in July. His prior experience at AB InBev will no doubt prove useful in helping him navigate the rapidly changing food and beverage space, where consumers are flocking to better-for-you options — often times from crafty, more nimble upstarts seen as more in touch with shoppers.
According to Kraft Heinz, Patricio helped grow brands at AB InBev, including Corona, Budweiser and Stella Artois. He also was AB InBev’s president of Asia Pacific from 2008 to 2012, and president of North America from 2006 to 2008, providing him with deep experience in growing businesses in both developed and emerging markets.
It remains to be seen whether naming someone who has worked at AB InBev where the company faces many of the same problems as Kraft Heinz will be enough to help revive the beleaguered food manufacturer.
Kraft Heinz and AB InBev are known for their mega-brands that are losing market share, which is a major reason the stocks of both companies have slid since 3G became involved.
While 3G, which focuses on slashing costs through zero-based budgeting, excelled at the financials, it had less expertise building brands and growing sales — especially in the face of the rapid shift by consumers toward healthier, fresher and natural brands that clashed with many of the offerings in its portfolio.
In an interview with CNBC, Patricio said he plans to focus his attention on improving Kraft Heinz’s speed, organic growth, brand building and making the company more consumer focused.
“I bring very different profile [than Hees],” Patricio told the business network, referring in part to his background in marketing. “My profile can help the future. It’s not about liking what happened, it’s about understanding the future. We need to lead, not follow.”
As consumer tastes continue to change and big food companies scramble to invest in growth after years of cost cutting and focus on margin improvements, the pressure will be on Kraft Heinz to stabilise its business.
Patricio will have the time between now and becoming CEO to assess the company and determine the changes he wants to make, but the Portugal native will have to move quickly to prevent Kraft Heinz from falling even further behind once he takes over.
Source: FoodDive.com, Bloomberg
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