Kraft Heinz aims to strengthen sales through marketing and innovation; however, the outlook for growth in 2025 appears subdued.
CEO Carlos Abrams-Rivera emphasized that “marketing and innovation” are “key enablers of our growth” for the new fiscal year. This comes after reporting a 2.1% decline in organic sales revenue and a 3.5% drop in group volumes for 2024.
“We have significantly increased innovation as a percentage of our organic net sales from 1.6% in 2022 to 2.9% in 2024,” Abrams-Rivera stated recently during the announcement of last year’s final numbers.
He continued, “We are focused on creating and providing consumers with products that are worth paying for—whether that be through cuisine and flavor exploration, high-quality convenient solutions, or expanding options and functionality through unique benefits.”
Finance chief Andre Maciel pointed out that the loss in volumes partially stemmed from pricing issues, particularly concerning four key brands: Lunchables, Kraft Mayonnaise, Kraft Mac & Cheese, and Capri Sun.
Maciel elaborated on the potential solutions: “As we think about improving overall competitiveness in the market, we are leveraging a combination of strategies.”
“We are focused on growing our base volumes in a sustainable way. This includes consumer-driven innovation, portfolio renovation, impactful marketing, and selective investments in pricing.”
“Looking to 2025, we plan to significantly enhance our investment in pricing. Mindful of consumer conditions, we will adjust price gaps in select categories—primarily across the four key brands identified by Carlos and in the U.S. away-from-home segment.”
While the CEO anticipates improvement in top-line revenue early this year—already more than a month in—organic growth is expected to remain flat or decline up to 2.5%.
“Looking ahead to 2025, we see key successes that aren’t yet reflected in our financials, and we expect to observe an improving top line throughout the year while preserving profitability,” he noted.
Strategic Brand Investment
Analysts have suggested that Kraft Heinz’s brands—beyond the four underperforming lines—are not measuring up against competitors.
Responding to this, Abrams-Rivera stated, “Our portfolio encompasses over 200 brands in more than 40 countries.” He further explained that the challenges reside mainly within four brands, specifically within the U.S. retail sector. This emphasis allows the company to concentrate its investments effectively in product development and pricing strategies aimed at enhancing top-line growth.
“As we implement these strategies, we will also be vigilant in managing our margins to avoid regression in our gross margins,” he added.
Margins improved during 2024, showing a 120 basis points rise reported and a 100 points adjusted to 34.7%. However, organic sales revenue decreased by 2.8% both in North America and the international segment, with emerging markets showcasing a positive trend of 4%.
Volumes also faced declines—4.2% in North America and 2.8% internationally, with a slight 0.5% growth observed in emerging markets.
Maciel explained, “Given the varying dynamics in different categories, our approach must adapt accordingly. In specific areas, affordability will guide our most substantial price investments to ensure establishment of competitive gaps.”
Abrams-Rivera suggested differentiated investment levels for various categories, asserting that Kraft Heinz will focus investments on sectors with favorable growth prospects.
The brand growth system is designed to catalyze momentum behind the four underperforming brands while simultaneously investing in “accelerate brands.”
“In each instance, we initiate the brand growth system, engaging in thorough, forensic assessments to uncover the most viable opportunities for driving brand superiority,” he stated.
“Our accelerate platforms concentrate on the most promising sectors within our portfolio where we possess a strong advantage. This strategic prioritization has contributed to growth in several iconic brands, including Philadelphia, Heinz ketchup, Ore-Ida, and Taco Bell.”
