Kraft Heinz, a US sauce, soup, and cheese major, is experiencing a downturn in volumes as consumers seek more affordable options in the food and beverage industry.
The company is also facing challenges in the North American foodservice channel. In the first quarter of 2024, Kraft Heinz reported a 1.2% year-on-year increase in net sales to $6.41bn, just below analysts’ estimates. Volumes decreased by 3.2 percentage points in the first quarter, showing an improvement from the previous quarter’s decline of 4.4 percentage points.
Despite the current situation, Kraft Heinz anticipates a return to normal volume levels by the second half of 2024. CEO Carlos Abrams-Rivera remains optimistic about the company’s future but acknowledges the challenges posed by the current business environment, including consumer pressure, inflation, and supply chain risks.
In particular, the US foodservice channel has proven to be a difficult market for Kraft Heinz due to changing consumer behavior.
CFO Andre Maciel emphasizes the company’s strategic approach to pricing and promotions to address consumer preferences and market conditions. Kraft Heinz’s portfolio experienced a 2.7% increase in prices in the first quarter.
Looking ahead, Kraft Heinz expects organic net sales growth of 0% to 2% and adjusted operating income growth of 2% to 4% in 2024.
